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DMA Data: Direct Mail Is a Good Buy
Date: December, 2010 --
Yes, we know you have to collect emails and you have to use them. But we hope you haven't lost sight of the fact that in the United States mail still outperforms everything but a telephone call in producing a specific consumer response. And even said call might have been prompted by a direct mail piece.
Consider the following from the DMA's ground-breaking Response Rate Report of 2010.
- Direct marketing accounted for 54.3% of all ad spend in 2009, and marketers spent $149.3 billion on mail. (By the way, in China only $543 million was spent on direct mail last year.)
- The letter-sized direct mail piece response rate was 3.42% for the house list and 1.38% for a prospect list. Compare these rates to 2005, when they were 3.33% and 1.71%. Customers are more responsive, prospects less so.
- For catalogues, response rates for both house and prospect files increased quite dramatically: from 3.56% to 4.92% and from 0.84% to 1.74% respectively. We're mailing smarter, it would appear.
- Say what you will about email, but on a cost per order/lead, it's higher than catalogs: $53.69 for email versus $47.61 for catalogs. The only mailed medium more expensive, to our surprise, was postcards at a significant $75.32 per order/lead.
Who is using direct mail? Well, the highest volumes come from the publishing, media and entertainment, and retail sectors. The strongest preference, that is percentage of ad budget spent, is still shown by financial services and nonprofit firms.
It is true that we all have to experiment with and perhaps migrate more budget to new media. We all need a website, which serves as an ad, of course. And since you have traffic, you might as well make it a member site and capture names if you can. Start with your email database of visitors and give them relevant content. Go to LinkedIn or Facebook or some other appropriate social media environment where your customers are likely to be found and see what you can learn.
But remember ICOM, a division of Epsilon Targeting, found in a survey this year of 2,569 US households and 2,209 Canadian households that young adults, for example, prefer direct mail and newspaper ads over online marketing in every category except travel. Consumers felt better about receiving mail than email in the product categories of food, cleaning products, personal care, health products and OTC and prescription medicines, and financial/insurance products. Certainly the element of personal privacy and intimacy enters into most of those preferences.
And ICOM also found that in the US 36% of respondents were more likely to trust information in a mail piece than online versus 29% last year. There was a similar increase in Canada, from 35% to 38%. Constant reports of hacking and phishing could well be having a serious impact here.
Finally, if response rate and trust don't convince you, channel availability should. 45% of US men and 35% of Canadian men don't have social media accounts. Women are more social, with 36% of American women and 31% of Canadian women not participating in social media.
Bottom line: not mailing will leave a significant portion of your customer and prospect base in the US and Canada untouched by what is the most economical, trusted, and effective marketing tool in the toolkit: the letter.
And be sure you get the letter there with the appropriate address. Don't forget that around 15% of the US population moves every year, and 41% or so of Canadians will move in any 5 year period. Both the US and Canada have change of address files Data Services, Inc. can run for you.