Direct Mail Marketing's Death Knell Slow to Come

Some see opportunity in emptier mailboxes

Crain's Cleveland Business
4:30 am, May 14, 2012

The reports of the death of direct mail marketing have been greatly exaggerated, to borrow a twist on Mark Twain's famous phrase.

It's clear that the ever-growing cost of postage coupled with the rise in use of email and social media marketing make it unlikely that small businesses ever will rely on the U.S. Postal Service as heavily as they did seven or eight years ago.

However, marketing via "snail mail" could be getting a second wind courtesy of new postal services, technological advances that allow more personalization and organizations taking advantage of barren mailboxes.

"As far as COSE is concerned, we see direct mail as a viable option for us now because so many people now do the online stuff that traditional mailboxes are less crowded and your message doesn't have to compete with as many other messages," said Randy Carpenter, a spokesman for the Council of Smaller Enterprises.

It appears COSE is not alone in its thinking. Despite postal rate hikes in recent years, direct mail spending is on a modest, yet steady, upswing.

In 2011, U.S. marketers spent nearly $90 billion on mail-based advertisements, up from slightly more than $84 billion in 2010 and $80 billion in 2009, according to New York City advertising watcher Winterberry Group. Still, the latest numbers are 20% off the 2007 spending of $103 billion.

Stamp of approval

For some small businesses, the postage increases have been too much to swallow given the already significant cost of direct mailing campaigns, said Jean Gianfagna, president of Gianfagna Strategic Marketing in Westlake.

Direct mail marketing among Ms. Gianfagna's business-to-business clients is down and those who do it are substantially more targeted in the mailings than in the past. Her clients who are marketing direct to consumers, however, are doing "a fair amount of direct mail" advertising, Ms. Gianfagna said.

She credited the U.S. Postal Service's recent rollout of new programs and services that are aimed at driving down the cost of direct mail for small businesses.

Chief among them is the Every Door Direct Mail program launched last summer. It offers small businesses a postage rate of 14.5 cents per piece, which is less than half the cost of large-volume first class rates (36 to 38 cents) and lower than the standard mail presort rates (mid- to high 20s).

With Every Door Direct Mail, businesses also get access to a free online tool to target customers in specific areas without shelling out cash for custom mailing lists, and they don't have to sort and ink-jet each piece of mail.

"With this new program, the small business owner could pay for the printing and then, go to the USPS site and choose his targeted area," said Gina Dalessandro, executive vice president at Cleveland marketing firm Quez Media Marketing. "It eliminates the cost of buying a list and ink-jetting the piece and the mail preparation cost."

Tech's role not what you think

Technology, ironically, is another factor in some direct mail use. While the flight to digital marketing, predominantly through email, was expected to bring about the demise of direct mail marketing, technology is now boosting direct mail by bridging print and digital advertisements and offering more personalized customer experiences.

Ms. Dalessandro said savvy direct mail materials now include QR codes, which connect advertising recipients to digital content, such as a website, or personalized URLs (PURLs), which connect the recipient to a personalized web landing page.

When combined with a targeted mailing list, such tools "make direct mailing more efficient," said John Hummer, account executive with Northern Ohio Printing Inc., based in Cleveland, giving small companies more bang for their advertising buck.

The bottom line is direct mail remains one of the best ways to prospect for new clients, some marketing executives said.

Email lists can be unreliable since people tend to change email addresses often, and marketing messages often are ignored in overloaded inboxes. And, there are legal restrictions on who marketers can email, said Marisa Lee, Quez Media Marketing's senior marketing manager.

Return to sender

Once a business relationship has been established, however, email and other forms of digital marketing are more affordable ways to engage and retain customers, she said.

Still, some small businesses say they will not be breathing life into direct mail anytime soon.

Victoria Stallard, vice president and co-owner of GTS Communications of Strongsville, switched to digital marketing five years ago and has not looked back.

She uses online marketing service Constant Contact to connect with customers, via emails or enewsletters, at least once a month. "(Frequency of contact) is something we never could have done with direct mail," Ms. Stallard said, "because of the higher cost."

Jennifer Lumpkin, marketing representative for New Adventures Early Learning and Child Development Center in Twinsburg, said even with a targeted list of local parents with young children, the chances of a direct mail piece getting read is simply too low considering the cost of printing and postage.

"We have found more success with face-to-face marketing at community events, constant press and photos on center achievements," Ms. Lumpkin said.


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