Recently, the results of a survey developed in partnership between Lob and Comperemedia, caught our attention as it provides insights and recommendations about the use of direct mail marketing campaigns. Although some of the findings may surprise marketers, the insights are credible and actionable to those seeking to realign their direct mail efforts.
The insights date from a 2019 survey recently published in 2021. A quick review of third-party data confirms that the results remain valid despite the time span between the fielded survey and publication. For the financial services category, direct mail will have continued relevance to marketing and positive growth.
At a high level, the report indicates direct mail remains “a vibrant and high-performing channel, especially when compared to digital marketing channels.” A remarkable 60% of survey participants indicate direct mail to be a more effective channel than email.
Key performance indicators – response rate and return on investment (ROI) – as reported by survey participants are proof that direct mail campaigns remain relevant not only as part of the integrated mix but also as stand-alone marketing solutions:
Direct mail response rate
- 64% say direct mail delivers the highest response rate of any marketing channel in use.
- DM response rates were high across industries and size of company.
- Over 50% of all companies report 5% or greater response rates across campaign type (acquisition, retention, winback, referral). For comparison, the average email response rate is reported as less than 1%.
Direct mail ROI
- DM typically has higher campaign costs compared to digital and email. However, 60% of respondents report that DM provides the highest ROI of any channels they currently use.
- Although measuring campaign performance is not as precise as with digital marketing, 93% of respondents indicate attribution for direct mail was comparable to other channels.
Direct mail lessons for financial services marketers
What can marketers learn from the survey participants? What findings are transferrable to future efforts from respondents who are successful and what gaps remain?
Budget enough – One third of survey respondents earmark up to 25% of marketing dollars to direct mail. Another 25% of respondents earmark 25 to 50% for DM campaigns.
Follow the campaign objectives trend – DM has been a lynchpin in acquisition marketing campaigns even with low-level targeting – geo targeting or credit profiling – being most commonly used by financial service providers. The survey indicates that DM volume is now more evenly split across acquisition and retention campaign objectives (60% split between the two), and 40% of mail volume is now focused on customer win-back and referral campaigns.
Tackle personalization – Here’s where marketers know they fall down: 58% of respondents report customizing the text of their DM (outer envelope and/or inside components), but true personalization is not typically being achieved even though it is highly desired by customers. Specifically:
- Personalized offers are used by less than 20%.
- Few marketers typically vary their “form factors” for different audience segments (e.g., use of a postcard versus a letter).
- Customized imagery in DM is typically not used: Only 8% report doing so.
Use the ideal combination of partners to support success – Technology is a driving force in the industry with 54% of respondents reporting use of a software platform for campaign implementation and 48% relying on traditional relationships such as printers and letter shops. Agency partners handle campaign management for 34% of marketer, while 38.4% of respondents rely on agencies for creative/design.
- From our experience, best-in-class DM campaigns rely on an ideal team of internal stakeholders, a marketing agency with direct experience and a technology provider for implementation efficiencies.
- Strategy and creative/design remain fundamental to success.
- Tech solutions bring automation to the process reducing internal resources that are needed for campaigns, campaign cost and timelines.
Evolve your view of direct mail – The survey reports marketers see direct mail “as an effective channel today and one that will continue to provide value moving forward.” Specifically:
- 59% expect to increase use of direct mail in the next five years.
- Respondents believe more diverse companies will turn to direct mail.
- Campaigns will continue to shift from acquisition to engagement/retention an opinion held by 73% of respondents.
- Direct mail will increasingly reach and motivate younger audiences who are “turned off by cluttered digital channels.
Insights and images in this post are sourced from “The State of Direct Mail: Insights from 200 Marketing Leaders,” research conducted in 2019 by Lob and Comperemedia.Tags: direct mail, direct mail marketing, financial services marketing, marketing channels, personalization, return on investment