SG360° has been conducting annual research since 2021 on the role direct mail has for marketers, and how consumers engage with it. We use The Future of Direct Mail insights to help our clients improve their omnichannel campaign performance and take better advantage of direct mail’s potential in the channel mix.
Melanie De Caprio, VP of Marketing, and Michael McCormick, Marketing Specialist, presented the 2024 findings live on June 27. Below, find a replay of the presentation and a description of the highlights with timestamps. Hover over the video and click the Chapters icon on the bottom right of the control bar to open the chapter links to navigate to a specific section. You may also request the full research guide.
Direct mail’s unique value in the channel mix
We start off at {03:19} by sharing marketers’ direct mail results, which place direct mail above other channels for most marketers on several of the most crucial KPIs, and in many cases, significantly above. This is despite continued cost increases, and explains why 81% of marketers plan to increase their direct mail budget in the next 12 months {03:46}.
Why marketers see these results
At {07:39}, we share the data on how consumers:
- like marketing mail
- respond to marketing mail
- act on marketing mail
Included in that is ages 18-39, at {12:55}.
Factors crucial to success
Knowing why the marketers in the research are getting great results is helpful. Knowing how you can emulate great results is even better. We show how to implement the four crucial steps to your most successful direct mail campaigns, including:
- Familiarizing yourself with consumer preferences {14:54}
- Maximizing your conversions by taking advantage of what your prospects are already doing {18:59}
- Using evolving technology to increase your order values {21:39}
- Optimizing postage with all applicable savings options {23:18}
Goal setting and measurement
Are you using the right metrics to determine the contribution of your direct mail? Most marketers aren’t, and it’s leaving them with an inaccurate picture of their direct mail performance. {26:23}
The Future of Direct Mail key takeaways!
At {30:18}, we synthesize the research into the most impactful takeaways for your direct mail results:
- Take advantage of better audience targeting at {30:36}. Our research shows that 42% of marketers using direct mail achieve better audience targeting than their other marketing channels. We show:
- the breakdown by industry
- reasons why marketers achieve better audience targeting with direct mail
- how you can improve your audience targeting for addressable marketing channels
- Inform campaign architecture with data. Here’s what to do with first- and third-party data to best inform highly effective, hyper-personalized addressable marketing campaigns. {35:25}
- Here’s how to test with a well-balanced holdout strategy. A holdout group is the only way to confirm it was direct mail that drove the prospect’s conversion. {37:42}
- The future is data-driven content. Use enhanced audience data to reach the relevant households with a dynamic message and offer, which in turn will increase conversions and strip out the waste from your mailing, lowering postage expense. {38:59}
The Future of Direct Mail Q & A
During the LIVE presentation, Melanie and Michael addressed questions from the participants. While Q & A was available only to the live audience, here’s summary of a few of the answers.
Q: How is SG360° assisting clients in leveraging AI to improve direct mail testing and customizing offers?
A: We are not yet comfortable with using generative AI for creative, for a couple of reasons.
- It doesn’t incorporate all of the audience insights that our data science team gleans from customer segmentation analysis that feeds clients’ personas. As we mentioned, that is an extremely important factor in direct mail performance and we believe that should drive the development of the creative, messaging, and offers.
- We’re also committed to unique and original creative ideas and strategy to improve our clients’ results, and as of now, that is not what generative AI can do.
AI and machine learning have been a part of our customer modeling, segmentation, targeting, and trigger programs for many years. From that standpoint, our data scientists use machine learning to make smarter decisions faster, on a regular basis.
Q: Do you see hyper-personalized direct mail as a viable option to raise conversion rates and ROI?
A: Yes, hyper-personalized direct mail is a viable option to raise conversion rates and ROI. The strategy achieves this by leveraging unique capabilities that other channels lack, such as:
- Highly targeted and relevant communication that includes personalized offers, messaging, and creative content based on key attributes of your ideal customer profile, increasing the likelihood of response.
- Omnichannel coordination with programs like SG360°‘s DigitalEnvelop™ that synchronize marketing efforts across both direct mail and digital channels to ensure prospects are targeted across multiple touchpoints, reinforcing the message and increasing engagement.
- Trackability and measurability at the individual or household level, which cannot be achieve with broad and anonymous digital marketing tactics.
By integrating these elements, hyper-personalized direct mail can significantly enhance response rates and overall return on investment.
Q: What is the importance of testing and why is the pain worth it?
A: Direct mail testing using a holdout audience is crucial for accurately measuring the success and optimizing the effectiveness of campaigns. Having a holdout strategy is the only way to truly understand the impact of direct mail on your conversions. By comparing an audience that did not receive the direct mail (holdout group) with those who did, you can confirm that it was indeed the direct mail that drove conversions.
While matching sales to the addresses that received direct mail provides insights into campaign success, it does not give a complete picture of direct mail attribution. A holdout group is necessary to isolate the direct mail’s effect from other marketing influences.
Using a holdout group with every mailing is well worth it, and it provides the quickest path to understanding and optimizing your campaigns.
Q: What is the best strategy for analyzing direct mail’s contribution to a multichannel campaign?
A: Implementing a multi-channel test cell strategy into your holdout testing allows you to compare different combinations of campaign exposures. By ensuring your holdout group and test cells share the same characteristics you’ll eliminate other variables so you can be sure any differences in response are due to the direct mail.
The insights gained from these tests justify the effort and can lead to significant improvements in conversion rates and ROI.
Download the full The Future of Direct Mail 2024 research guide.
“Every year I look forward to this report because it delivers actionable and timely insights.”
S.F., Market Analyst
