Pundits have been proclaiming the death of direct mail for over a decade. However, nothing could be further from the truth.
While spending on direct mail dropped during the recession, it has held steady since 2010 for several good reasons:
- Direct mail response rates are excellent. The 2015 DMA Response Rate Report found that direct mail response rates average 3.7% to a house list and 1.0% to a prospect list. This compares to response rates of about 0.1% for email, social media or paid search. As a result, even though direct mail is more expensive, its average cost-per-acquisition of $19 is competitive.
- Holding something in your hands is more memorable than reading an email or social media post. In fact, MRI scans confirm that the areas of the brain associated with emotional engagement are activated more by physical ads than online material.
- A majority of American consumers in Epsilon’s 2012 Channel Preference study said they enjoy getting postal mail from brands. Two things they particularly appreciate about printed mail is that they can read the information at their convenience (73%) and refer back to it as necessary (61%).
- Perhaps because the amount of mail a typical household receives has declined significantly over the last decade, 62% of Americans said they enjoy checking their mailbox for postal mail. With the average business person receiving more than 85 emails per day, it is hard to imagine anyone saying this about checking their email inbox!
The American Cancer Society recently shared their direct mail results. In 2012, their $10 million direct mail acquisition program generated 252,000 new donors. When they stopped this program in 2013 during a strategic restructuring, the number of new donors declined by 11 percent and new donor revenue dropped by $11.3 million for the year. But because many donors contribute for multiple years, this one-year hiatus is projected to cost them $29.5 million in revenues over a 5 year period. After relaunching direct mail the following year, the American Cancer Society reports that every $1 invested in direct mail acquisition brings in $7 in revenues during the next 3 years.
Of course, in the final analysis, the only thing that matters is whether direct mail is cost effective for your company or organization. Develop a compelling and personalized offer, mail it to a carefully targeted list, and calculate its return on investment based upon the lifetime value of new customers you acquire. You are likely to be pleasantly surprised by direct mail’s cost effectiveness!
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