Rely on Research More During Unpredictable Times

The economic downturn affected everyone's expectations for continued prosperity. Deep concerns caused knee-jerk reactions of cutting expenses, reducing mail volumes, waiting and seeing. Now that the dust of our latest recession has settled and you forge ahead with growing your business, what are your plans?

How much of your budget should be allocated to direct marketing? Can you confidently commit to increased mail volumes? When is the right time to mail? How do you emerge triumphantly with an ambitious marketing plan to acquire more customers, subscribers, members and donors?

A good place to start is by analyzing the industry as a whole. Find out how direct mail has fared in past times of uncertainty. Analyze the trends. Track your competitors' activities. Great thinking! But where can you get that information?

Your list managers and brokers may hold the key. While they can predict which lists and segments work best for you and leverage the value of your data, they also can provide tools to help you make those global decisions.

Because of their access to a range of list order transactional data, brokers and managers can offer research to help establish and achieve marketing objectives. And because they field your questions and suggestions for information to help plan campaigns, they understand how to direct professional research consultants when looking at data beyond their internal sources.

For example, a recent study, “The Cyclical Analysis of the Direct Mail Market,” conducted by the Winterberry Group in conjunction with Wilkofsky Gruen Associates, looked at the impact economic downturns have on advertising expenditures.

The report indicates that since 1960, there have been five periods when the economy was sluggish or in decline. During each instance, direct mail was by far the best performing medium compared to television, radio, newspaper and magazine advertising.

That same report uncovered many remarkable facts that will let you rest easy as you formulate your direct marketing plan:

· Direct mail expenditure has increased each year over the past 50 years.

· Direct mail outperforms other media during periods of weak or moderate economic growth.

· Direct mail advertising is expected to grow in excess of 7 percent over the 2003-05 period.

While general industry research helps plan overall business growth strategies, more recent industry-specific data can help you implement tactics.

Again, your list brokers and managers stand at the forefront of direct mail activity knowledge — provided they have the size, client diversity, technological resources and personnel to conduct meaningful research and report on it in a clear, actionable way. The larger list managers, brokers and compilers receive orders from as many as 10,000 companies a year.

While protecting the confidentiality of specific mailer information, analysts can aggregate this data over time and code it by type of products offered and categories of interest. Based on three years of studying such activity, it is possible to analyze a staggering volume of more than 7 billion names shipped.

Your list management or brokerage firm has enough data at its fingertips to track trends to help you spot what is going on in your industry. ALC publishes a Seasonal Mail Trends report based on data collected from providing services to many mailers in every mailing category.

The current report identifies places where trends consistently appear and areas of trend changes. For instance, July was a light month for apparel catalogs three years ago. However, last year volume jumped 5 percent. Likewise, business publishers cut volume 5 percent from December over the past three years. One of the more dramatic shifts in mail volume comes from the technology sector. Over the past three years, mailings increased 6 percent in January while decreasing 5 percent in December over that same period. It seems to indicate that hi-tech marketers may be getting positive results mailing after the holidays.

While this type of data can be insightful for all mailers, smaller marketers establishing a toehold in the industry can see what is working for their category and act upon it. In this same vein, large direct marketers expanding into new product lines can get a head start by analyzing trends in niches.

What does this tell you? Perhaps you should mail in months during increased activity. Maybe you should test during periods of light activity to break out of the pack and avoid mailbox competition. It depends on your specific marketing niche, your own internal research and the recommendations of your list and data professionals.

It's easy to aggressively market via mail in good times when consumer and business spending is up. However, uncertain times call for empirical evidence on which to base strategy decisions.

Don't overlook the vast data that list companies can access, organize and analyze. List firms constantly analyze how an individual list performed against itself and how well campaigns perform over time. But you also need to know how you are doing vs. everyone else — your market and the industry as a whole.

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