Direct mail offers excellent return on investment, say industry experts
As we enter a new decade, direct mail continues to offer an excellent return on investment and deserves to have a larger market share, say industry experts at the Strategic Mailing Partnership (SMP).
Not only that, a digital only strategy for 2020 is neither realistic nor profitable, with younger marketers again looking to direct mail as an effective channel.
Offering their insights into what the 2020 may bring, SMP board members said despite sustainability being high on client agendas, mail had a huge part to play, with innovations such as Partially Addressed Mail enabling brands to develop highly targeted strategies without the use of personal data.
Launched in November 2019, Partially Addressed Mail is addressed to a household rather than an individual, using demographics at postcode level. This enables mail to be targeted using demographics rather than personal data.
Figures confirmed by the new JICMail audience measurement tool show 88% of partially addressed mail was read, filed opened or set aside for later, while over a quarter (28%) resulted in a commercial action such as buying, donating or using a coupon.
SMP chair Judith Donovan said it was vital that the industry continued to evolve alongside the digital sector to make the most of existing opportunities.
Analysing data, for example, could optimise insight into both customer preferences and the effectiveness of different delivery channels.
‘Mail is a long established, trusted channel,’ she added, ‘and unlike e-mail, it won’t get lost in your inbox. There is a real opportunity in 2020 to increase the share of the marketing spend and present customers with an excellent return on investment.’
SMP board member Patrick Headley, CEO of Go Inspire, echoed this view, adding that younger marketers in particular were turning back to direct mail: ‘It now seems widely accepted that a digital only strategy is neither realistic nor profitable. I think 2020 could be a very interesting year for mail as more and more younger people seem to be displaying an interest in the channel.’
Used alongside a digital strategy, mail could also play an extremely effective role in a multichannel communications strategy, driving customers towards a business’s online offerings.
Others said that as UK businesses spent increasing amounts to promote their services – more than £22 billion in 2018 – the mailing industry had to consider how to increase its share of this. Partially Addressed Mail, for example, offered the ability to create highly targeted campaigns without the need to store customers’ personal data.
One commented, ‘UK businesses spend more each year trying to promote their products and services – more than £22 billion in 2018 – and we have to change our pitch in order to increase our share of this spend. Currently, only £1.5 billion of this is spent on mail.
‘As an industry, we have to change our currency of how we sell from the cost of producing a certain number of mailings to ‘spend £10 with me and I will try to get you £50 back’.
‘We need to be a partner to our customers by helping them grow the businesses through choosing the right product and format, or being their architect/expert for mail because you are there not only as their manufacturer but because you also want to get that £50 back for them.’
Others predicted further market consolidation that would see more competition for high value contracts, presenting opportunities for smaller and medium sized businesses.