Is There Life Beyond the Mailbox?
"Buy one, get 10 free!"
How many times have we tossed aside a direct mail offer without giving it a second glance? The reason is too many direct mail offers are vying for the consumer's attention in the same old ways -- with stale offers that fail to grab anyone's attention.
Despite the increased use of direct mail by U.S. companies, production managers and marketing vice presidents have seen a continued push for innovation, reduced cycle time, personalization and variability -- all at a lower cost. The result? Marketers face remarkable pressure and a continued need for a higher return on investment.
In light of increasing competition and higher postage costs, direct marketers must reach their targets more effectively and find ways to avoid creating mailbox clutter. Fortunately, through more segmented targeting and creating less expensive formats, a solution is within reach.
Today, the average consumer receives more than 20 pieces of mail a week. As a growing number of companies seek to build their brands through one-to-one marketing techniques, an increasing number of marketers are competing for share of mind. Other factors contributing to mailbox clutter include deregulation in numerous industries where companies are targeting consumers for the first time. Nonetheless, to many consumers all this mail looks the same -- the only difference is a return address when marketers fail to distinguish themselves. Indeed, it is critically important to create something that draws attention to the brand's positioning.
Naturally, this begs the question: If nobody intentionally creates mailbox clutter, then why is there so much out there? In the past, few marketers took advantage of direct mail, until credit cards evolved as a major profit center. By 1995, more than half of the adult U.S. population placed an order by mail for a product or service. Today, direct mail has proved to be an effective marketing tool, particularly as companies fine-tune their marketing databases and gather prospect information through the Internet and other techniques. Sampling opportunities also have increased. Some of the nation's leading packaged goods companies are using direct marketing to send shampoo, soap and other items to specific targets who respond to direct mail offers.
How can marketers reduce mailbox clutter? Direct marketing clearly is an effective tool to measure effectiveness and test offers when a prospect's lifetime value merits a campaign. Before beginning any direct marketing effort, companies must address their databases and determine each prospect's lifetime value. We use the following formula: lifetime value equals the frequency of purchase multiplied by the profit margin times the duration of loyalty. For example, diapers and cigarettes merit a strong lifetime value as consumers continue to buy them for years. Potato chips and soft drinks, however, don't merit a database based on both product margin and brand switching. (They do merit strong image-oriented broadcast campaigns, as we have seen several marketers using a strong combination of both broadcast and direct mail.) In addition to targeting the audience, it's important to reach prospects frequently. Perceived usefulness also is affected by familiarity, according to the U.S. Postal Service, which notes that "reading rates for shapes or formats are highest when the household is a previous customer."
Once the database and lifetime value are established, marketers should work with a printer who understands their business goals and objectives and can take advantage of new techniques to help a piece stand out in the mailbox -- and ultimately in the consumer's purchasing decisions. A good printer will help create a different format, shape, size or high-color lithography, or add heavier paper stock to give a piece a unique and inviting feel. According to a 1994 study by the USPS, larger than letter-size envelopes (44.7 percent), letter-size envelopes (43.2 percent) and postcards (39.1 percent) were the three most likely direct mail shapes to succeed. Moreover, according to our own research, anything odd-shaped gets noticed, followed by color or die-cut pieces and pieces that look (but need not have to be) expensive.
Though creating a high-impact piece may seem more expensive, most of the newest techniques can be printed using an inline process, eliminating the need for contracting with multiple vendors, which thereby decreases costs, reduces cycle time (sometimes by more than 70 percent) and increases response rates through more timely offers. Innovative techniques such as pull-tabs, die cuts and scratch-offs, combined with personalization, can help marketers send attractive, out-of-the-box offers to which prospects will eagerly respond.
Recently, we have seen a growing trend in the number of marketers using nonconventional packages. Self-enclosed mailers used by customers such as grocery store chains, drug stores and department stores -- combined with increasing levels of personalization -- are a rapidly growing piece of the direct marketing business.
Benefits of eliminating mailbox clutter. Given that marketers only have six seconds to impact customers once the piece has arrived, packages must have something that compels consumers to read and respond. Clearly, if it doesn't get noticed it won't get opened. Ultimately, marketers can increase their ROIs by creating pieces that generate higher response rates from personalized and highly targeted audiences. Today, fast food, credit card and consumer packaged goods marketers are taking advantage of inline printing processes to deliver colorful, interactive self mailers in place of the traditional offer in a plain white envelope.
As opposed to broadcast or print advertising, the success of direct mail lies in the ability of marketers and catalogers to target whomever they want. Undoubtedly, marketers who use direct mail indiscriminately or as general advertising are spending money inappropriately. However, marketers who use their databases successfully and create more personalized, high-impact direct mail pieces will significantly reduce mailbox clutter while increasing response rates and building brand equity.
Stephan Carter is president of RRD Direct, the direct marketing solution for R.R. Donnelley & Sons Co., Chicago.