The Future of Direct Mail
As discussed in my Editor's Note, this issue of Inside Direct Mail will be our last print issue. While that is an unfortunate event, the good news is that IDM will continue to live ... on the web, as a weekly e-newsletter.
IDM has played a valuable role for direct mailers and marketers for 25 years. Now, rather than bemoan the decline of print, we're going to celebrate our past and be excited about the digital future of this publication. After all, Inside Direct Mail Weekly promises to be more relevant and of greater service than ever.
Similarly, direct mail has been a successful workhorse for decades for many companies, but now seeks to remain relevant in these trying times. Therefore, to deliver a cover story worthy of IDM's long history in print, I went with the topic on everyone's mind: the future of direct mail.
It made perfect sense to open up these crucial questions to IDM's frequent contributors over the years, including leading copywriters and direct marketers. Response was overwhelming, in a positive way, so I've compiled the great answers I received via phone and email into a roundtable, in which we tackle one big question after the next.
Boldt: In your opinion, what is the future of direct mail? Will direct mail resume its former position when (and if!) the economy restabilizes, or is this channel forever altered?
Herschell Gordon Lewis, copywriter: Direct mail never again will see the apex of supremacy it enjoyed in its golden period-as a loose estimate, 1946-1996. But, paralleling media threatened by online intruders, it will continue, because it has a permanence and completeness. The new media can't match those elements because they're geared to a shortened attention span.
Steve Cuno, chairman of Response Agency: No one knows the future of direct mail, but two factors point to an opportunity. One, thanks to the internet, mailboxes today contain mostly advertising mail, most of which is inept. The other factor is that, unlike spam, direct mail cannot go into the trash without a recipient at least taking a look. For both reasons, our shop has found that well-targeted, well-executed direct mail rises to the top with greater power than ever. But note the qualifiers "well-targeted" and "well-executed." Inept mail works no better than it ever did.
Bob Bly, copywriter: Certainly we'd all RATHER do our marketing online instead of offline if we could—it's so much less costly. But not every offer can be sold effectively with email. In insurance, for instance, direct mail is still the workhorse for marketing and will be for the foreseeable future—people don't like to buy insurance online.
Bob Merrigan, president of fundraising agency Merrigan & Co.: The channel may be forever altered, but it's certainly not dead. Online activity, by virtue of its low outbound cost and staggering growth in results, is getting a lot of attention. The poor, old workhorse, direct mail, tends to get lost in the excitement. As an example, for one of our clients, online giving increased more than 300 percent in 2008; however, it's still less than 15 percent of overall support.
Peggy Greenawalt, president/creative director of direct marketing agency Tomarkin/Greenawalt: The communications universe is experiencing a sea change. I think direct mail will regain some of its lost ground, if the post office doesn't run amok on pricing. It's still a superior way to pinpoint target and deliver messages. However, I am convinced that a portable pocket device for communications and entertainment is the present and the future. I carry the iPhone in my pocket (even in my bathrobe), and I can't understand how anyone can live without it.
Mal Warwick, founder/chairman of fundraising agency Mal Warwick Associates: Ever since I first became involved in direct mail fundraising 30 years ago, the field has been undergoing constant evolution. The dominant trends have been mushrooming competition, rising costs, increasing sophistication and use of technology, increasing personalization, and falling acquisition rates.
I see no reason to believe those trends have ended with the Great Recession or will suddenly disappear when the economy finally recovers some semblance of its former strength. However, I don't believe these trends are cause for pessimism. Over the years, my colleagues and I have learned how to make the most of this evolving reality. Most of our clients are flourishing, despite their heavy dependence on direct mail.
Elaine Tyson, copywriter: I think direct mail will resume its importance to magazine publishers. The economy has taken a toll with many companies reducing volume out of necessity. Many have dropped at least one campaign during 2009. As times improve, publishers who want to thrive will resume subscription campaigns. The companies that were most successful in the past never abandoned direct mail. Those that want to be successful in the future will return to it. The simple fact is you cannot manage a rate base without some level of direct mail.
Mark Everett Johnson, copywriter: Direct mail will remain important for many direct marketers. Some mailers are doing very well right now due to reduced competition in the mailbox paired with carefully targeted creative. Examples: A health newsletter publisher that altered their copy led to focus on the relatively low cost of the subscription compared to the value of good health, and a financial newsletter publisher whose copy offers specific actions for protecting one's wealth in volatile financial markets.
Pat Friesen, copywriter: It remains a viable medium for keeping in touch with many market segments and prospecting in others. What has changed is that you can no longer afford to do mass prospect mailings that aren't targeted. However, even with ever-increasing costs, it still has certain advantages. It's three-dimensional, hard to ignore, perceived as being more personal and has tactile appeal other media lacks. It's also virus-free and reaches people email doesn't.
For example, a client in a service industry recently called me with a traditional letter-writing assignment. After successfully testing an email cross-sell offer to his customer base, he wanted to make the same offer in a letter to his email nonrespondents. Even with a 15 percent to 20 percent email open rate, he still wasn't reaching 80 percent to 85 percent of his highly qualified buyers. A matchback of his direct mail respondents showed they hadn't opened the email, but they did open and respond to the direct mail.
Grant Johnson, CEO of direct marketing agency Johnson Direct: Direct mail won't die, but it will remain forever changed. There is still no better way to prospect for business than traditional direct mail. Volume will decrease, as better segmentation due to better analytic tools will be the norm.
What will continue to happen is those who do direct mail well will prosper and those who do it marginally well or poorly will falter. Mail will still play a key role as a driver to action: raising money, buying a product or service, visiting a store or website, or being used as the main channel to close the sale through fulfillment.
Keith Goodman, VP of corporate solutions for Modern Postcard: I believe the market will be coming back very strong. At the end of the day, businesses need to acquire new customers, and direct mail has proven, time and time again, that it is one of, if not the most, cost-effective methods of customer acquisition for virtually any business. When you look at the slow but steady decline of the print industry, the issues concerning unsolicited email (spam), the DVR to skip commercials and commercial-free satellite radio, where else is there for businesses to effectively capture new business?
Digital media will capture a portion of the loyalty and retention markets with opt-in email, but even with 20 percent average open rates (that are currently declining), direct mail will play a major role there as well.
Boldt: How has your job of copywriting/design/direct marketing changed in the past couple of years?
Bly: In 1982, when I started, 100 percent of my work was offline and 98 percent was print (I did a little radio and video). Today, 70 percent of my work is online and 30 percent or less is print. In a few years, I suspect it will be 80/20 online/offline.
Lewis: About 60 percent of my copy now is geared to the web. I anticipate that number increasing to at least 75 percent as social media (of which I'm not fond, because the lunatics can ruin the asylum) become more prominent as marketing tools.
Merritt Engel, VP of fundraising agency Merrigan & Co.: Like most copywriters, we find ourselves writing more for the interactive space and for more integrated campaigns. Project development time has shortened dramatically as organizations need to get their message out more quickly and respond to changes in the marketplace. A positive change—as competition has increased—we've noticed increased emphasis placed on messaging. The format and list alone are not enough to carry a piece.
Merrigan: It has also forced a greater focus on the information needs of the recipient. Today's prospect/customer has far more information sources to choose from ... and far more ability to self-select what information to pay attention to. It's no longer enough to simply be in front of them; you have to be relevant.
Warwick: One of the keys to success in fundraising generally, and in direct response specifically, is personalization. As our use of that technique becomes more extensive, the craft of copywriting becomes ever more complex. Writing 100 versions of an appeal isn't easy! But my colleagues and I will have to get used to that sort of thing.
Grant Johnson: I have become more consultative as prospects and clients are more concerned about the effectiveness of their direct mail and are unsure of how to proceed. I am anticipating and seeing a larger wholehearted commitment to direct mail or an abandonment of the channel like never before. All or nothing, at least near-term.
Tyson: My job and my company's focus has shifted away from pure creative to outsource management and consulting. We still do creative work for management clients, of course, but project and freelance work is not something we actively seek. This change occurred over time. It was a conscious decision on our part about 10 years ago. I read the handwriting on the wall and decided to head in an alternate direction.
Friesen: One of the biggest changes in my copywriting assignments over the years is that they are no longer only for direct mail or catalogs. I've enjoyed learning to write for online media and am fascinated by social media and how it feeds into what I write for other direct response communications.
Right now—perhaps because of economic factors—I'm writing more direct mail copy for financial services than for other industry segments. Insurance of all types, loans, credit counseling, etc. People are concerned about preserving what they have-health, possessions, investments, etc. I'm fortunate to have solid background in writing about intangibles, so this has served me well during these economically uncertain times.
Goodman: I have taken much more of a consultative role with my clients. On the corporate side, many larger clients have cut significant portions of their marketing teams, leaving them shorthanded. They welcome the support and insight that my team is able to offer. On the smaller business side, we are the marketing people that they can't afford to hire and are open to new ideas and tactics.
Boldt: What are your predictions for the role direct mail will play for most organizations in the multichannel mix?
Grant Johnson: It will still be a driver to action but will have a dramatic shift toward use as a follow-up tool. It's much more effective than email from a prospecting aspect, and some of those companies who abandon mail will come back and use it to begin the dialogue. As the web grows more and more, mail will play a key part in driving new visitors. Email as a retention tool is very powerful, but too much email, spam blockers and overuse will make it less effective and some firms will go back to mail.
Gary Hennerberg, president of the direct marketing agency The Hennerberg Group: A contrarian view would be to say that direct mail will rebound significantly, mainly because fewer people are reading printed magazines and newspapers, and they aren't watching as much television. Online, there are only 10 firms who will ever be in the top 10 on certain keywords searched by prospective customers, and there is only so much room on a computer screen for advertising. So that puts direct mail in a unique position of being able to fill in the gaps left by declining readers and viewers of mass media.
Boldt: Do you think email and social media and mobile will fade over time ... and direct mail make a comeback of sorts?
Bly: Email will continue to be a powerhouse in online marketing unless some change is made in the internet to negate that; e.g., better spam filters, even tougher laws, a per-email transmission charge. Social media is a decidedly minor marketing method when it comes to generating ROI and will be even less important in the future when everybody realizes what a waste of time it is.
Greenawalt: As in life, media and communication evolution is unavoidable. I'm sensing some decline in social media, except more people using it to IM and email. Regular email is already fading. Twitter seems to be used most often by older users. The only letters people write today are thank-you notes and wedding invitations. Even party invitations are often evites. For the foreseeable future, it's mobile.
Engel: Not really. I think we'll see new and more advanced forms of social media. Email is here to stay, but consumer control of what they receive will only increase. However, as these channels become even more cluttered, direct mail will continue to provide a standout opportunity for marketers.
Tyson: You can't sell a magazine subscription using social media. A great many people have confused branding and audience engagement with making a sale. Some social media have already started to fade. I haven't seen any evidence that customers prefer email, Facebook or Twitter when subscribing to a magazine. In fact, quite the opposite is true. And, that's why I feel pretty confident that direct mail will resurface as an important channel of subscriptions.
Goodman: As for email marketing, companies are going to focus on what helps them attain their goals. I think what you see happening right now are people are realizing that even though email marketing is much lower priced than direct mail, it is not providing the numbers that people need to grow their business. With open rates for house lists hovering at 20 percent, it is leaving 80 percent of their customer bases uncovered and completely open to their competitors if they are not using direct mail in association with email.
I definitely see a return to direct mail over the next couple of years.
Boldt: What trends/techniques/strategies do you see increasing in the coming years?
Merrigan: More database/personalization are a given; it's difficult to have a genuine relationship if you don't know who you're speaking with! I think premiums will continue to play a significant role in fundraising acquisition, where the critical first hurdle is to simply get attention. And, because there are so many causes competing for the same donor dollars, there will continue to be a need for fresh package ideas (and/or production advances that lower the cost of existing packages). I think that all customers and donors are raising the bar on communications: They expect you to know them, to recognize them, and to speak to them in ways that reflect your appreciation and understanding of past interactions.
Grant Johnson: You will see much more creative use of direct mail formats, personalization and, hopefully, testing. Data will become more and more paramount, and look for more co-promotional efforts with offers and messaging.
Hennerberg: A trend I see is marketers, local retailers and professional firms moving into both online and direct mail as fewer people subscribe to newspapers and magazines, and watch less television. Local marketers are searching for other ways to promote their businesses, and it often includes a mix of direct mail and websites.
Tyson: Currently, publishers seem to have overlooked the fact that direct mail is the most flexible source of subscriptions available to them. You can actually conduct statistically valid testing of offers, lists, price and creative. Direct mail can be manipulated in a way that other sources can't, so far. You can mail more or fewer pieces, create a low-cost package. Mailing address list availability is still superior to email lists in most markets. At the same time, marketers can reduce the amount of subscriptions needed from direct mail by working to strengthen their web efforts, email campaigns, insert card production and agency business, not to mention renewals. These things aren't mutually exclusive. They are basic. And, not enough people are paying attention to basics right now.
Mark Johnson: I'm still seeing long copy consistently winning tests against shorter copy, provided it is strongly benefit-oriented. Customers want benefits, and longer copy can deliver more benefits. It is still easier to increase ROI by increasing CPM in the mail rather by than reducing it. The hybrid voucher is a great example.
Goodman: Some of the biggest advances in direct mail marketing has come on the list side, which allows marketers the ability to target better than ever before possible. There is no need for "spray and pray" marketing when you just target the prospects that are most likely to do business with you. Offerings such as modeling, analytics and appending, once reserved for only the most advanced Fortune 1000 marketers, are now available to virtually any business down to the mom and pop bicycle store.
Boldt: How is copy and color and design, on the outer as well as inside the effort, being used differently today?
Greenawalt: People are running scared. Afraid to put money into testing. Afraid to take risks for breakthroughs. Creative is not valued. There's little market for great creative right now. People who know technology are doing creative, because they don't charge much for it. I call it shooting your horse.
Cuno: It's important to explore things like color, freemiums, both sides of the envelope, etc. But sometimes I fear that these and other devices are used in place of, instead of to increase readership of, strong copy. Ultimately, copy is and always has been where selling takes place. Skilled use of an envelope back increases sales, not by looking cool for its own sake, but by luring more people into the copy. And that, of course, only works if the copy is powerful. The art of compelling copy must never take a back seat.
Warwick: In fundraising, I believe it's a mistake to use color and graphics so aggressively. Testing repeatedly shows that plain, businesslike appeals outpull flashy ones.
Friesen: Again, these are things to test. I've read/heard that personalization on outers ups response. I've read/heard that solid colored envelopes pull better than white. But who knows if it will work for every market, every brand, every mailing? You've got to do what you know/believe to be appropriate—then test, test, test.