Industry attitudes: Direct Mail

19 November 2009 | By Ruth Mortimer

Direct mail is regarded as a valuable business channel by the boards and senior management teams of organisations, according to marketers.

Marketing Week’s Direct Mail Attitudes research reveals that 56% of marketers believe that direct mail carries weight with the board and top executives at their organisation. However, 30% of the respondents believe that direct marketing is not taken seriously at the executive levels of their businesses.

As a marketer from a large retailer with more than 5,000 staff reports in the research: “Direct mail still provides one of the highest returns on investment when carried out in a targeted and controlled way.”

Another marketer from the financial sector in a business with several hundred employees adds: “DM is often overlooked as ‘expensive’. But in terms of offering measurability of campaign and marketing spend effectiveness, it is second to none as a channel for customer acquisition.”

Optimism is also seen in marketers’ response to the recession. Just 5% think the economic climate has had a “very bad” effect on the industry, while 7% think that it has not been affected at all.

Even those with less polarised views tend to take a moderate approach, with 22% thinking that there has been a “bad effect” on the industry, compared with 31% who think DM has only suffered a comparable amount to other marketing disciplines and 28% who think there has only been a “slight effect”.

The postal strikes over the last month have, however, had a major impact on how marketers are planning their campaigns for the next year. The frustrations are clear. One respondent from a company with less than 50 staff, complains: “The threatened/ongoing post strikes decimate any thoughts of timings, which means the only sensible course is electronic mail, which is now really the only solution.”

This may be the reason why interactive direct marketing is currently proving more popular than its paper counterpart. Indeed 45% of marketers say that they are using interactive DM methods, while 33% are using physical direct mail in their businesses.

A respondent, who acts as head of marketing for a large financial group with more than 5,000 staff, warns: “Mail-based physical DM is under severe threat from interactive and web-based methods. Throw in the uncertainty of postal services in the UK and my 2010 plan will start to see less and less reliance on physical means.”

A fellow marketer also warns that mail arriving late means that money-off coupons or vouchers could have expired before they reach the target audience, which indicates “a potential reputational risk”.

Another reason why digital direct mail may have generated more interest than traditional forms is the environmental impact of using paper in marketing materials – 54% of marketers claim that “green” issues affect the amount of direct mail that they carry out, although 46% say this doesn’t have an impact.

But 22% of marketers report that they are using both physical and interactive techniques together for the best results. One marketer from a leisure firm with less than 50 employees claims they use both techniques to complement each other. “Direct mail – both online and offline – works very efficiently and profitably for us with good overall return on investment,” he says.

And with the popularity of email marketing and online forms of direct mail, some even suggest that physical mail may have better impact in future. Simply too many firms are now using interactive methods and, as a result, they may have lost their charm. One automotive marketer points out: “With the growth of online DM alternatives, together with the economic situation, there is a significant reduction in ‘junk mail’ being received through the post. Thus, it is creating a far more beneficial return on investment (ROI) and reply rate.”

But as yet there seems to be no agreement among marketers on just what response should be generated by a “successful” DM campaign; 42% claim that a 5-10% rate would be acceptable to them, but in practice just 22% see this result, with more than half revealing that their response rates fall below 5%.

Low response rates need not be a problem if brands target the right people. A marketing director from the events industry says: “Mailings are getting smaller and more personal; these are the ones that are effective.”

Other effective ways of getting consumers to respond to DM materials include using vouchers (23% advocate this) and money-off promotions (24% suggest these). Other anecdotal suggestions by marketers for what works well include “shock tactics”, “calls for donations” and “free gifts”.

As one global marketer puts it: “Ultimately, DM should encourage a dialogue with consumers. This medium can help build relationships, which in turn depends on openness and trust. Experiment and test, but remember the consumer’s right to privacy and the need to make a good return on investment.”