U.K. direct mail dips, despite sector growth

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Volumes in direct mail are continuing to fall in Britain with more than 5 billion items sent in 2006 - a dip of 2.1 percent, according to Royal Mail.

Figures from Royal Mail published earlier this month also showed that expenditure dropped by 2.1 percent to $4.55 billion from $4.66 billion. In addition, business-to-consumer direct mail volume was down 1.6 percent to just below 4 billion items. Business-to-business volume was down 3.6 percent to more than 1 billion items. Royal Mail remains bullish despite the results.

"This is the result of companies across all sectors improving their targeting to create even more relevant and personal offers for their customers and prospects," said Leonora Corden, head of market development at Royal Mail.

The postal service said it experienced a decrease in mail volume of 4.6 percent during the last quarter of 2006 (October to December) with 958.69 million items sent compared with 1 billion mail pieces during the same period in 2005.

Despite this, several industries have increased their use of direct mail in Q4 2006. Building societies, for example, have increased use of DM by 18.8 percent. Building societies are British financial institutions that are owned by members and offer banking and other financial services.

A total of 15.92 million mailings were sent by building societies in the last quarter of 2006, up from 13.4 million in the same period in 2005, Royal Mail said. These strong results illustrate the importance of direct mail to the financial sector for driving sales and boosting customer retention. This growth can be attributed to the number of new product launches and services, along with the growing need to treat customers fairly and communicate the impact of interest rate rises on mortgages, savings and loans.

The insurance sector also experienced a small increase in direct mail volumes for the October to December period from 83.44 million items in 2005 to 83.87 million in 2006.

Royal Mail also revealed a rise in the volume of direct mail sent to the 55- to 64-year-old age group. In addition to being responsive to direct mail, this generation is particularly important to the financial sector as they approach retirement, complete their mortgages and see investments come to fruition.

"Building societies are showing increased growth in direct mail as it continues to work well for them," Ms. Corden said. "It provides a cost-effective way to communicate complex financial information to existing customers and potential customers on a one-to-one basis."

Other sectors that performed well include government with a year-over-year volume increase of 6 percent to 17.47 million items. The charity sector also showed strong growth with a volume increase of 9.1 percent to 132.27 million mail pieces.

"The charity sector has long recognized the benefits of direct mail and these figures reinforce its importance to them as a marketing tool," said Emily Travis, a market development manager at Royal Mail.

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