Direct Mail Still Delivers Results
How a trusted marketing channel will continue to expand your market share
BY Tyler Anderson and Jim Schaffer
Yes, you read that right: the snail’s still in the race. As we mark the beginning of a new decade, many businesses are ready to scrap direct mail marketing. Yet many others, including several on the cutting edge of technology, have hit on direct mail’s truly exciting potential.
So, what does this mean for the funeral profession? Precoa’s Tyler Hornibrook, Vice President of Marketing, and Jim Schaffer, Vice President of Product Development, share why direct mail still works, and why it makes sense to integrate it with sophisticated data and analytics.
We all crave novelty. It’s what drives us to wait in line for hours to buy an iPhone or to book flights to distant cities—and the fact is, we can’t help it. Newness literally excites us, firing off millions of neurons in our brain’s reward center.
In the realm of marketing, our brains are getting their biggest jolt from digital. And for good reason. Never before have businesses been able to gather so much data about customers or to target market segments so precisely.
Direct mail marketing, on the other hand, has been around since top hats were still in style. Compared to digital channels, direct mail takes longer to reach customers and requires more initial investment.
Yet direct mail is still quite vibrant, maybe more than ever. 76% of customers report that it’s more trusted than digital, and it provides increased brand recognition as well, both because it’s tangible and because customers are more likely to see it.
Direct mail also maintains one of the highest response rates of any marketing channel, a distinction only strengthened by data and analytics, which lead to more efficiency and better predictions.
If today’s marketplace has demonstrated anything, it’s that innovation is important, but so are results. At Precoa, we believe in continuing to innovate, but we’ve also seen how well direct mail performs for our partners. It’s stronger than ever, and while that may eventually change, right now it’s here to stay.
Of course, this is also playing out elsewhere. If Amazon’s holiday catalog showed up in your mailbox this season, you’ve witnessed how much value the online retail giant places in sending customers something they can touch.
And then there’s Google, who uses direct mail to promote their search engine advertising, perhaps because they already understand the challenge of capturing digital attention. Google probably also knows that direct mail causes 79% of customers to act, while 73% of customers prefer it over all other forms of advertising.
There are plenty of smaller but no less successful examples as well, everyone from Warby Parker to Casper, along with companies such as AT&T and Verizon, who could easily text or email their customers instead of generating mailers (in fact, they do all three).
All of this simply goes to show that choosing between digital and direct mail is what logicians call a false dilemma. An omnichannel approach—one in which the customer experience is integrated across channels, allowing them to choose how they prefer to interact with you—is how today’s top brands connect with customers.
So don’t choose one or the other. Choose both.
The key ingredient making direct mail more powerful today is data. Testing and refining your message and design is still critical, but these can now be complemented by look-alike modeling.
The more technical term for this is “multivariate predictive modeling,” which essentially means using multiple characteristics from your most responsive customers to make informed predictions in other markets.
For example, let’s say that the prospects most likely to respond to your direct mail survey share a few similarities: they own a home, they are 45-75 years old, and they subscribe to the same popular magazine. Using regression analysis, you can discover which of these variables are correlated in a statistically significant way, which leads to precise targeting.
Here’s how this might play out in the real world: A firm using a broad direct mail plan is consistently dropping mail. Returns have leveled off despite remaining higher than the industry average, but they’re looking for a boost—plus they want to expand their reach because of their new location in the next town over.
Enter the predictive model. Within the first six months, returns grow by an average of 50% in the areas surrounding their original location and they generate an impressive return rate from families near their new location. Why? Because the statistical model that “clones” the attributes of their most desirable customers not only improves efficiency but also provides a better blueprint for reaching the outer areas of their market.
It is also less expensive.
When most businesses compare digital and direct mail, the decision comes down to cost. Pay-per-click ads cost pennies compared to the postage, materials, and processing involved with mailings.
Still, it takes thousands if not tens of thousands of pennies for these ads to result in a prearranged funeral. What Precoa has found after two years of running digital marketing and direct mail in the same areas is that the digital cost per sale is usually much higher.
But what accounts for this difference?
Efficiency. Walking may be great exercise, but hop on a bike and you’ll go 3X faster and use 5X less energy. The bicycle’s relatively simple design conceals a well-orchestrated system that radically enhances performance, and similar efficiencies can be engineered for direct mail too.
A carefully planned, well-integrated direct mail program should guarantee that no lead falls through the cracks. This means that as soon as responses come through the door, the processing should be flawless. They need to be digitized and integrated with a customer relationship management (CRM) platform, which should connect with whatever follow-up program is in place, which should connect to the advanced funeral planners who meet with families.
Such interdependence makes direct mail more effective and less expensive, and when you add scale, the advantages only increase. You can negotiate better rates and become even more streamlined. Not to mention that the insights you glean from data modeling can be applied across channels, allowing direct mail to work in tandem with digital to create multiple connections with families.
It’s easy to dismiss direct mail as passé. The broad perception that it’s on the decline comes from assuming it is too expensive and too archaic to reach today’s customers.
Yet savvy marketers know better. Using an omnichannel approach that includes both digital and traditional channels allows businesses to leverage direct mail’s tried-and-true impact throughout their marketing plans. Far from being stamped out, direct mail can be fused with today’s most sophisticated analytics to increase efficiency and drive results.
The truth is, more and more businesses are in on this secret. They’ve seen how giving customers a message they can touch improves both brand awareness and sales, especially when it connects to the rest of their pipeline.
When done well, direct mail is a prized possession, a crown jewel of any marketing mix. Leaving it behind now risks losing out on increased market share and future business.