In comparison to blasting out emails, direct mail is a much more time consuming and expensive means of outbound marketing. However, if done properly, direct mail can be a very effective medium to cut through the digital marketing clutter and can deliver a fantastic ROI.
In 2017, direct mail household response rate is 5.1%, compared to .6% email, .6% paid search, .2% online display, .4% social media. This is the highest response rate the DMA has ever reported, since coming out with the Response Rate Report in 2003. - DMA Response Rate Report
Email and Direct Mail - The Relationship
We mentioned in our last webinar blog that direct mail can be used to communicate with those customers who have unsubscribed from your email marketing. But what about those who are already highly engaged with your email marketing messages? One would think direct mail would be an effective supplemental medium to increase customer purchases.
AgilOne's Customer Success team recently ran a series of A/B tests for a current client on this assumption: did sending direct mail to customers who were highly engaged with emails actually produce a lift in their purchases? After several rounds of testing within multiple segments, we discovered that customers who were highly engaged with email did not in fact increase purchases when supplemented with a direct mail send.
Besides simply gaining a better understanding of your customers' communication preferences, customer data platforms allow marketers to quickly increase ROI. By running the above test, our client is now able to save money on direct mail by removing their highly engaged email customer segment from their mailing list. You know the saying, "knowledge is power?" Well in this case, that power is the confidence to allocate marketing budget to the exact segments and marketing channels that will improve customer experience and their overall lifetime value.
Is Less Really More?
Another common issues our clients face when sending direct mail is a limited budget that doesn't allow them to send pieces to every one of their customers. To help a client better optimize their direct mail budget, we recently performed an analysis to see whether sending one customer several direct mail pieces was more or less profitable than sending fewer direct mail pieces to a wider segment of customer. If you're spending your entire direct mail budget to send multiple pieces to a smaller segment of customers and it isn't making a difference in revenue, it makes more sense to broaden your customer segment and send direct mail pieces to more customers less frequently throughout the year to continue getting your brand in front of a larger audience.
With this particular analysis and client, we found that sending direct mail less frequently to a larger audience was more profitable and saw a better ROI than sending more pieces to fewer customers. However, every company's customers are different. AgilOne's Customer Support team is always looking for ways to improve our client's marketing strategies by utilizing the data readily available in their customer data platform, and these two direct mail examples are just a small sample of the testing and analyzing we do for our clients every single day.
Want to learn more about how AgilOne's platform and Customer Support team can help improve your marketing ROI? Drop us a line and someone from our team will reach out shortly to discuss your specific business' needs!