(Direct)(Marketing)(Tools)|(Direct Marketing Tools) Expert

Three Rules of E-Mail Marketing

Wednesday, February 6, 2008

Direct mail

Any medium that can be used to deliver a communication to a customer can be employed in direct marketing. Probably the most commonly used medium for direct marketing is direct mail, in which marketing communications are sent to customers using the postal service. The term junk mail is used in common parlance to refer to direct mail, which may also be referred to as admail or bulk mail.

Direct mail includes advertising circulars, free trial CDs, pre-approved credit card applications, and other unsolicited merchandising invitations delivered by mail to homes and businesses. Bulk mailings are a particularly popular method of promotion for businesses operating in the financial services, home computer, and travel and tourism industries.

In many developed countries, direct mail represents such a significant amount of the total volume of mail that special rate classes have been established. In the United States and United Kingdom, for example, there are bulk mail rates that enable marketers to send mail at rates that are substantially lower than regular first-class rates. In order to qualify for these rates, marketers must format and sort the mail in particular ways - which reduces the handling (and therefore costs) required by the postal service.

Advertisers often call direct mail "targeted mailing", as mail is usually sent out following database analysis. For example a person who likes golf may receive direct mail for golf related products or perhaps for goods and services that are appropriate for golfers. When direct mail uses database analysis, it is a type of database marketing. The USPS prefers to call it "advertising mail" (admail for short), noting that some people might find offers of interest to them in it. [1]

Recent changes in direct mail technology
Advances in computing and communications technology have significantly impacted the direct mailing industry in recent years. As computers become more powerful and databases become larger, new opportunities arise for direct mail companies to perform more in-depth processing of their mailing lists. Mailings can be targeted based on location and demographic data. This allows mailings to be targeted more specifically and potentially increases response rates. Web sites are appearing which allow clients to create their mailing lists interactively using map-based interfaces.

Types of Direct Mail

Direct mail permits the marketer to design marketing pieces in many different formats. Indeed, there is an entire subsector of the industry that produces specialized papers, printing, envelopes, and other materials for direct mail marketing. Some of the common formats, include:

-Catalogs: Multi-page, bound promotions, usually featuring a selection of products for sale.
-Self-mailers: Pieces usually created from a single sheet that has been printed and folded. For instance, a common practice is to print a page-length advertisement or promotion on one side of a sheet of paper. This is then folded in half or in thirds, with the promotional message to the inside. The two outside surfaces are then used for the address of the recipient and some "teaser" message designed to persuade the customer to open the piece.
-Clear bag packages: Large (often 9x12 or bigger) full-color packages sealed in a clear, plastic outer wrap. The contents show through the clear bag, giving the potential for maximum initial impact. Clear bag packages can be extremely effective and are very affordable based upon the campaign open-rate.[citation needed]
-Postcards: Simple, two-sided pieces, with a promotional message on one side and the customer's address on the other.
-Envelope mailers: Mailings in which the marketing material is placed inside an envelope. This permits the marketer to include more than one insert. When more than one advertiser is included, this is often called "marriage mail". Valpak is one of the largest examples of a marriage mail service.
-Snap Mailers: Mailers that fold and seal with pressure. The sides detach and the mailer is opened to reveal the message.
-Dimensional Mailers: Mailers that have some dimension to them, like a small box.
-Intelligent Documents: Programmable mail pieces built dynamically from database information, and printed digitally for faster production.

Business-to-Business Mailings (B2B)
Business products and services have long used direct mail to promote themselves. Traditionally, this worked in one of two ways. As a direct sale, therefore precluding the use of a salesperson or a retail store, or as a method of generating leads for a salesforce. The former method was ideally used by products that were easy to sell, were familiar to the prospect and needed no demonstration. The latter method was used for large ticket items or for those that needed demonstration for example.

Unaddressed mail
Delivery of unaddressed items through letterboxes ("direct mail without the stamp") takes place in large numbers throughout the western world. Deliveries are either made via the postal service, independent delivery companies or local newspaper publishers.

It is a lower-cost alternative to direct mail and therefore can produce a lower cost per response for the advertiser. It can be used as part of a mixed media campaign, e.g. with TV or Radio. It should be noted though that unaddressed mail is considered illegal by the United States Postal Service and can result in fines, but not imprisonment, of up to $5,000 for individuals and $10,000 for businesses. This includes items that are placed upon, supported by, attached to, hung from, or inserted into a mailbox. [2]

In Australia, unsolicited unaddressed mail is called "junk mail", unsolicited addressed mail is comparatively rare.

Advantages and Disadvantages of Direct Mail
Some people respond positively to direct mail advertising and find useful goods and services on offer. Traditionally, this was more true in rural areas where people had to travel many miles to do their shopping and direct mail and mail order shopping was a major convenience. However, many people dislike it, in the same way as with telemarketers' calls and e-mail spam, and some jurisdictions like the US have laws requiring junk mailers to withhold their offerings from residents who opt out.

Advantages for marketers include the following:
-Targeting - Historically, the most important aspect of direct mail was its ability to precisely target previous customers. If a suitable list was available, it could do a good job of targeting prospects.
-Personalization - Direct mail can address the customer personally and be tailored to their needs based on previous transactions and gathered data.
-Optimization - Because of its direct accountability, direct mail can be tested to find the best list; the best offer; the best timing (and many other factors). Then the winning tests can be rolled out to a wider audience for optimal results.
-Analysis - The bulk mailing is large enough to allow statistical analyses. For example the results can be analysed to see in detail the performance of individual offers in say a squinch report which shows sales per square inch. With suitable media or source codes, the performance of lists can be captured. These enable better selection of offers and lists for future mailings.
-Accumulation - Responses (and non-responses) can be added to the database, allowing future mailings to be better targeted.

Disadvantages include:
-Cost - The cost per thousand will be higher than almost any other form of mass promotion (although the wastage rate may be much lower). Also, development costs in database acquisition/development.
-Waste - Large quantities of paper are thrown away (see below).
-Alienation - Some recipients resent direct marketing being "forced" upon them, and boycott companies that do so. Moreover, they may obtain Prohibitory Orders against companies whose direct marketing mail they find offensive.

Critiques of Direct Mail and the Movement Against it
Many consumers, as well as environmental protection groups, are concerned about the environmental impact generated by junk mail. According to 50 Simple Things You Can
Do To Save The Earth:[1]

-Each year, 100 million trees are used to produce junk mail.
-250,000 homes could be heated with one day's supply of junk mail.
-Americans receive almost 4 million tons of junk mail every year. [3]
-The yearly production and disposal of junk mail consumes more energy than 2.8 million cars.

Opting Out
An organization called the Mailing Preference Service allows people in the United Kingdom to register with them for free and they will ensure those people's addresses are removed from 95% of mailing lists.

A similar service is provided by Junkbusters for removal from the USA's Direct Marketing Association members' and other mailing lists. In the United States, some junk mail can be avoided by registering with the Direct Marketing Association Mail Preference Service, similar to Do not call registries, though mailer participation is voluntary.

Several websites critical of junk mail have guides for people interested in reducing the amount of junk mail they get. Examples include the Big Green Switch (UK-based) and the Center for a New American Dream.

No comments: