Sixty Seconds on the Future of Direct Mail

As environmental issues reach the top of the political agenda, what is the future for junk mail, already banned in several countries and how can its advocates defend an 98% failure rate?
An integrated approach
Yes – there is a future for direct mail but not in its present form. Despite some scaremongering, direct mail will not be replaced completely by smarter electronic alternatives, the green lobby will not stop us chopping down trees to turn into mailing packs and the mailing preference service list will not grow to 100% of the UK adult population. But each of these factors will play a part in restricting the rate of growth of direct mail.
The degree to which this is allowed to happen will be dependent upon how far the many stakeholders in the direct mail sector – from the financial services companies themselves, through advertising and direct marketing agencies, list owners and brokers, to printers and the postal services – are prepared to go to be creative in the solutions that they can provide to make their material more relevant, appealing and, ultimately, responsive. It is the financial services companies and the way that they manage their supply chain that will determine the future for direct mail rather than the consumer or competing media choices. On a unit cost basis, the delivery of a direct mail piece appears extortionately expensive compared with many of the new media alternatives such as sending an email or a text message. But the measurements which need to be considered are the cost per acquisition and beyond that the profitability of the business attracted through different channels.
If direct mail is to measure up on these scales it needs to improve its targeting and reduce wastage and there are many tools, techniques and technologies available to help achieve this. CRM systems and the associated growth in customer profile databases can be one of the most potent tools for ensuring that the right message is presented to the right prospect at the right time. Variable digital print is also a key element in the most successful DM campaigns, allowing the contents of the mailing to be highly personalised and tailored to the requirements of the recipient.
It is also critical that direct mail is considered to be only one element of an integrated marketing programme. Different media will have different roles to play in a marketing campaign, depending on the message that is being conveyed, the product being promoted, the desired response or call to action and the stage in the purchasing process. The preference of the recipient should also be considered and where possible this should be reflective of an individual’s choices rather than using broader social or lifestyle segmentation. Interestingly, although they are becoming increasingly sophisticated and accessible, most consumers consider e-media communications and telemarketing to be more intrusive than direct mail and their use is inhibited by anti-spam software and the requirement for the consumer to opt-in.
Direct mail practitioners and the companies that use DM need to embrace technology to its fullest extent. This is not just in the adoption of CRM systems and the use of the latest database marketing and personalised
printing technology, but also optimising the ways in which these are integrated with the organisation’s other key business systems. The single view of the customer that many financial services providers strive for should contain as much marketing information as possible alongside the administrative facts and figures. If direct mail is to continue to be considered one of the primary components of the financial marketers toolkit it needs to establish its own niche as the perfect solution for certain consumers in certain circumstances, embrace new technology and work alongside other media alternatives.
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