Are Direct Mail Marketing's Days Numbered?

Is direct mail marketing dead? If it is, no one’s bothered to tell home improvement contractors, who continue to make regular use of the U.S. Postal System to send postcards, letters, flyers, and other printed pieces to select prospect lists, with mixed results, that is, in the 0.005 to 0.02 percent range of return.

Proponents of online marketing have been making the case for email, as opposed to direct mail, for at least 10 years. They argue that if you build the right email list, you can accomplish exactly the same thing with email that you would with direct mail—focusing, for a few seconds at least, the one-on-one attention of your prospect to an offer you’re making—at just a fraction of the cost. That fraction consists of what’s left when you’ve factored out the design, printing, mailing, and tracking of your mailed marketing piece, whether that’s the pricey wedding invitation or the generic postcard.

Moreover, online marketers say, email marketing also allows you to track results of individual campaigns—and your return on investment for same—far more accurately. With direct mail, you only know the percentage of people who actually responded to your piece by contacting the company. But many CRM systems come with in-depth analytics that tell you whether or not your email ever got opened, how long it was opened for, and which embedded links were clicked.

In Bed With Email

If there’s a downside to email marketing, it may be that the average person today is simply deluged with digital. Smartphones are a big reason. People can’t take their eyes off them, and the obsessive/compulsive checking of email is one thing they’re likely to be doing when they’re staring at that screen. According to the latest ramblings from the website ExpandedRamblings.com, 50 percent of Americans check their email in bed, 42 percent check email in the bathroom, and 18 percent check their email while driving. Just where else they may be checking their email is best left to the imagination.

The site says that the open rate for retail emails—such as digital messages from home improvement companies—is 22.7 percent.

Explaining “Why Email Marketing Is King” several years ago in the Harvard Business Review, writer Arthur Middleton Hughes argued that “because of electronic links, those who open your emails can do their own research …” right then and there. But there’s another benefit, as the folks at Improveit360 point out: Because it’s so inexpensive—1 percent of total direct mail cost, the HBR claims—email is “a great way to stay in touch with prospects as well as past customers. Keep your business top-of-mind for when they’re ready to hire your home improvement business.” That makes it possible to afford to reach further back in the sales funnel and stay in touch with the prospect who isn’t quite ready to talk to a salesperson yet, or the prospect who’s heard your pitch but is still glued to that fence about buying. If you ignore them, they’ll soon forget about you. Nudge them regularly with a series of discreet messages, and you’ll be the one they call.

A Formula for Success

That’s not to say direct mail doesn’t retain some advantages. Home improvement companies have been using direct mail for decades, and for many, it still yields results. If your piece is well-written and designed to draw the eye, you can expect a response rate of somewhere between 1 percent and 2 percent, according to McCarthy & King Marketing, and the difference between the 1 percent and the 2 percent—that would translate to double the lead cost—is the difference between giving something away versus offering a reduced price.

But there are ways to improve on that. On its blog, EnerBank USA, a leading provider of financial services to home improvement contractors, offers what it calls the 40/40/20 rule, which is the formula for driving a high ROI in a direct mail marketing campaign. This rule has it that 40 percent of the impact of a direct mail piece comes from “sending it to the right people,” 40 percent comes from “the value of the offer,” and only 20 percent has to do with the creative and text of the piece. In other words, think hard about who wants your product and what may be needed to actually move them to take action.

The author advises that contractors can do two things to make their direct mail marketing yield higher return: 1) “Narrow the target audience down based on specific demographic and behavioral criteria,” and 2) test different offers with small segments of your list to see which offer brings in the most qualified leads and sales.

Why It Works

In the “Top 5 Reasons Why Direct Mail Still Works,” marketer Resource Solutions cites the Element of Surprise. Emails come and go, being swiftly deleted, regardless of the message. “But,” the author argues, “if that same person checked their mail that morning, and out of a pile of bills, a beautiful wedding style mailer fell out, with a simple, personalized, and to the point message on the front …”

You get the idea. Added to its various strengths is the fact that there is a built in advantage to using direct mail, simply because the average person today is drowning in email, and direct mail—sparse, tactile, arriving once a day—is thereby more likely to get noticed.

Of course that’s probably going to depend on the customer demographic you’re trying to reach. At Forbes, writer Lois Geller argues that 1) direct mail is the only reliable way to reach “reasonably affluent males,” and that 2) “the over-50 crowd, already large and growing, has a lot more money than younger folks and they’re just as happy to deal with you in print as they are in the cyber world.”

Besides its appeal to this particular demographic, direct mail’s other attractions, according to HomeownersMarketingServices.com, is the fact that it “gives you the space you need to tell the whole story,” and it allows you to use emotion. That is, where email is all about the facts, direct mail pieces can “inspire, frighten, cajole, convince, make cogent arguments, and motivate.”

But still, cost remains the downside. Not so much of the design, and printing, since these are variables that can be managed by finding a different designer or a different printer. No, it’s the actual mailing that makes this form of marketing increasingly less competitive and efficient. Mail volume is dropping, and as it does, postal rates go up. “Postage is sky high and heading higher,” says the site.  And that’s not likely to change.