Optimarketer: The Marketing Optimization Blog

"They Mail 100 Million Pieces A Year; Surely They Know What They're Doing"

I'd like to share a quick story from inside one of the biggest direct mail marketers in the free world.

It was an old American institution with an outstanding brand reputation and excellent employees. But because of the enormous mail volume, the marketing department was largely production driven.

The staff certainly knew how to run projectable direct mail tests. But only a fraction of the essential tests ever hit the streets.

Here's the comical part: This organization's untested approaches that failed in the marketplace were periodically ripped off by competitors.

The running joke inside the marketing group was, "The poor bastards thought we actually knew what we were doing."

Lesson: Don't count on other businesses to do your testing for you.

Freaking Maxim for Direct Mail Marketing Professionals

Build at least one test into every major direct mail campaign. No exceptions.

The Illusion of Savings

Direct marketing math has always been straightforward. Revenues minus expenses equal profits.

Easy, right?

Not to everyone. Every year, we encounter direct marketers who in effect say, "Screw the ROI," and turn cost minimization into the number one goal.

They generally begin with a search for a dirt-cheap direct mail format. Doesn't matter who they're targeting or what they're selling. Cheaper is better.

Soon they find their answer: Postcards! Yep, those same vellum rectangles that are so useful when you're on vacation and just have to mail something trite to the folks back home.

For sure, the format is seductive. Postcards are readily available, come in a variety of bright colors, and are really cheap to print and mail. There's just one hitch.

Very often, they don't pay out nearly as well as formats that enable direct marketers to properly display the concept, tell the story, merchandise the offer, and capture the response. It's not unusual for postcards to pull a lower ROI than any other format. If you're skeptical, run some tests of formats, see what happens, and let me know.

I've never met a boss who was overjoyed to hear, "That postcard mailing bombed, but we're real proud of the fact that we cut the in-the-mail cost."

The approach that costs less but fails is terribly expensive -- and definitely not cost-effective.

Why Direct Mail Remains Surprisingly Relevant

Full disclosure: As an undergrad, I majored in marketing and worked for a rather colorful direct mail consultant (not to mention the king of mail order fruitcake, but that's another story).

Basically, I've been knockin' around the direct mail game my entire adult life. But these days, the majority of our revenues come from online marketing.

When it comes to direct mail, I can be an honest broker.

Direct mail didn't die for several good reasons that have little or nothing to do with spam. For one thing, many email lists only contain around 20% of the quantity of their postal counterparts -- and lots of marketers can't afford to miss 80% of the target group. In some categories, the only worthwhile lists available are postal lists. To this day, I've yet to see a wildly profitable campaign that ran on lousy lists.

And how 'bout all those direct marketers selling high-end products and services who need to be uber intrusive, and want to whip way beyond the ordinary math of conventional direct mail and start a dialogue with the highest possible percentage of le creme de la creme prospects? That's an argument for dimensional direct mail, otherwise known as clutter-busters or 3-D mailings.

Finally, we have the folks who simply prefer direct mail. Seniors are as good an example as any. Yes, lots of old-timers enjoy receiving email, but millions don't. And ultimately, consumers have the final say, by voting with their greenbacks.

Yep, we'll keep seeing higher growth rates in Internet marketing for the time being. Trees won't fall in cases where digital marketing is more cost-effective. But don't expect direct mail to fade into the sunset anytime soon.

What are the best approaches for your business? That's easy. Carefully think through your viable options -- then run your own tests and see for yourself.