Famous Last Words: Direct Mail Adds Up
Two years ago, "Direct Mail Doomed, Long Live Email" was the headline of an ONLINE Media Daily post. The media research firm Borrell Associates of Williamsburg, Va., crunched some numbers and decreed that direct mail is deader than Kelsey's nuts.
In October, the U.S. Postal Service—which is in woeful shape—announced that while the volume of First Class mail was off 7 percent, direct mail was up 3 percent and the agency is determined to make direct mail so attractive to marketers that this traditional medium may well be the salvation of the USPS.
As readers know, my wife Peggy and I made our bones in direct mail—starting to collect the stuff in the early 1980s and launching the WHO'S MAILING WHAT! newsletter and archive service in 1984.
For a decade, e-commerce captured the imagination of marketers and eclipsed old-fashioned direct mail. After all, email is cheap; it's quick; it's easy.
It also is wildly undisciplined and a monumental pain in the neck. For example, on Oct. 11, my Yahoo inbox contained 16 emails from Flirty-, Saucy-, Naughty- and Juicy Dating. During the day, another 15 came in. I receive more than 100 efforts from these creeps every week, plus well over 1,000 additional efforts that are untargeted, sloppily written and miserably designed.
Why am I inundated with this crap?
It costs little to nothing to send out email. Last May, a study revealed that a spammer had to send out 12.5 million messages to sell $100 worth of Viagra.
A mailing of 12.5 million pieces would cost $87,500!
For someone whose DNA is hard-wired to respect the discipline—and above all the arithmetic—of traditional advertising, I face my Yahoo inbox with dread. I love my postman. Happily, I am not alone.
Here's a fascinating statistic: An Epsilon/ICOM survey last year revealed that the 18-34 age group prefer print advertising—direct mail and newspapers—to e-commerce for many products and services, and by margins of two to three times.
They are tired and distrustful of the continual invasion of their privacy and avalanche of useless messages perpetrated by greedy online snoops and spammers from around the world.
One Huge Advantage of
Direct Mail: Secrecy
Direct mail is the not-so-secret weapon for direct mail testing. Make a wee drop of 20,000 pieces in Tucson and another 20,000 in rural North Carolina and only two people will know what you are up to—yourself and the U.S. Postal Service.
If the test works, step up 10 times to 400,000 mailing packages around the country and potential thieves and competitors still won't catch on. If the second test confirms the results of the first test, go for 4 million. A couple of pieces might fall into the hands of a competitor, but at that point you are way ahead of the guy. If the 4 million-piece drop reconfirms the initial results, shoot the moon and leave the potential copycats eating your dust.
However, take caution:
1. Direct mail is expensive. The takeaway here: only deal with knowledgeable, experienced direct mail professionals.
2. Arithmetic is the end-all and be-all of direct mail. At $700 per thousand, or 70¢ a pop, it doesn't take many mail pieces sent to the wrong people or with the wrong offer before money starts cascading through the floorboards and you lose big time.
Consider the chart to the left: If you spend $7,000 to test 10,000 pieces, you need 175 orders, or a 1.75 percent response, to break even.($7,000 / $40 = 175 orders). Note: Profit is considered a cost.
In short, know your arithmetic or stay out of direct mail.
Denny Hatch is a freelance direct marketing consultant and copywriter, and author of the Business Common Sense e-newsletter. Visit him at www.businesscommonsense.com or www.dennyhatch.com, or contact him via email at email@example.com.