Direct Mail - Don't call it a resurgence

What is more accurate is to say that direct mail has become one of the more exciting “new” channels for eCommerce brands as they look to differentiate themselves from their competitors and gain cut-through in a highly saturated digital marketing environment.

Many rapid growth UK eCommerce brands, including the likes of Hello Fresh, Wayfair, Beer52, Harry’s and Bloom & Wild, have incorporated the direct mail channel into their marketing mix. However, it’s more expensive and time-consuming than their tried and trusted digital channels. Many marketers have no expertise when it comes to executing campaigns and it takes longer to realise full results. So why do they do it? The advantages can be illustrated most clearly when positioned against those digital channels with which eCommerce marketers are so familiar.

1. Cut-through

It’s simple. Today’s letterbox is comparatively empty compared to our email inboxes and social media feeds, meaning brands can get their message in front of a significantly broader proportion of their target audience. Let’s use email campaigns as an example. If you’re getting a 25% open rate with your email sends, you’re probably pretty happy, right? Now compare that to the 100% of direct mail recipients that will, at the very least, pick up the catalogue (or whatever format the brand has chosen) and view the front and/or back cover to work out who it’s from and who it’s for before deciding on whether to keep it or put it in the recycling. Not bad! And that will be the case whether you’re targeting existing customers or prospect audiences.

2. Sales

Direct mail’s primary purpose is to drive sales. If you look at a catalogue or any other form of direct mail marketing from retailers, the call to action will be to go online (or pick up the phone!) and buy. What’s more, catalogues, in particular, give marketers more space for more products and, coupled with the fact that human beings like to browse tactile things, this means average order values are generally 15-20% higher than the average across digital acquisition channels.

3. Measurability

This follows closely from sales. Direct mail is dead easy to measure. Offer codes allow you to track performance day by day (as you’ll do with your digital campaigns) but you can also run “matchbacks” to identify the names and addresses from the audience you mailed that purchased during the campaign window. Recipients will not always use an offer code so this is vital to get an accurate read on performance. You can then report accurately at CPA, ROAS and contribution level, making it very easy to justify further investment in the channel.

4. Lifetime value

eCommerce brands that have built a business on digital acquisition channels almost unfailingly report the same problem – high customer churn. Put simply, they can recruit high volumes but relatively few go on and become loyal, repeat buyers. Direct mail CPAs will always be higher than digital due to the cost of print and postage. However, that’s acceptable if the customers recruited through the channel are worth way more in the long term. For example, beauty and skincare brand This Works see an average uplift of 28% in first year spend and 47% in spend over the first 2 years from direct mail recruits vs the average across their online channels. Lifetime value directly follows customer engagement and direct mail’s tactile nature, along with its greater scope for conveying brand values, ways to buy, wider product range and ways to interact with the brand and community on social media, generates significantly better audience engagement than digital campaigns.

5. Scale

No growth-minded marketer is going to be excited about a channel they can’t scale. Data specialists can help marketers test for growth in each campaign, minimising exposure whilst maximising rollout potential. Depending on your brand and your audience, prospect audiences can be scaled by up to 10x.

The “C” word

Coronavirus has changed everything for everyone. Some brands are hunkering down for what we all hope will be a relatively short period of disruption whereas others are seeing a huge demand for the products. For the former, more expensive forms of marketing have rightfully taken a back seat in preference for cheaper and more reactive digital channels, like email and Instagram, as brands aim to keep their customers up to date with the latest developments. However, when normal service resumes, and it will, the storytelling role of direct mail should not be underestimated as brands look to recover. In recent years, customers increasingly want to know what the brands they buy from stand for, where their products come from, and even how they support local communities. It’s no longer just a price war on Google shopping. Even as we emerge from these most unusual and unnerving of times, Coronavirus will dominate the narrative for months to come as customers look for familiarity in what will inevitably be a new normal. Channels that allow marketers to create a strong narrative around their brand may just have a greater role to play than ever.

By Ben Collier, Business Development Director Epsilon Abacus

First published by DMA, https://dma.org.uk/article/direct-mail-dont-call-it-a-resurgence