Melanie De Caprio, Vice President of Marketing at SG360°, shared insights – in 22 minutes – from our 4th annual The Future of Direct Mail market research at the 2024 DELIVERED conference in September. Although the complete research guide spans 27 pages of valuable information, Melanie highlighted key points and shared critical data beneficial for any omnichannel marketer.
You can watch Melanie’s full presentation from DELIVERED above, browse the key highlights below, or request the complete guide here. Or do all three.
Looking for specific details? Hover over the video and click the Chapters icon at the bottom right of the control bar to access the chapter links.
The Future of Direct Mail
SG360°‘s annual The Future of Direct Mail market research looks inside the minds of marketers and the hearts of consumers to get a full picture of the role direct mail plays, with the goal of informing and improving direct mail performance.
491 B2C marketers from a wide range of verticals who use direct mail participated in our research. 48% were at VP level or above.
Research participants also included 1,148 consumers, aged 18-74. The group was almost evenly split between male and female, with an age breakdown that mirrors the U.S. population.
Marketers are Committed to Direct Mail
Despite postage increases, marketers remain committed to the direct mail channel. We know this because 81% of marketers told us they plan to increase their direct mail budgets.
Why are marketers continuing to invest aggressively in this channel in the midst of postage increases? To answer this question, Melanie takes a look at the direct mail results marketers are seeing versus other channels.
Direct Mail Provides the Best Results {2:35}
Most marketers report seeing their best conversion rates, highest average order values, and largest prospecting audiences coming from their direct mail marketing. These successes are reflected in their ongoing support of the channel, despite rising postage costs.
% of Marketers for whom direct mail beats all other channels on these KPIs
Further, our research shows that:
- 88% of marketers who obtain their highest conversion rates (CVR) from direct mail see a CVR 5% higher than the channel with their next best CVR.
- 91% who achieve the lowest customer acquisition cost (CAC) from direct mail see CAC 5% lower than their next best channel.
- 86% of marketers attribute direct mail with their highest LTV.
People Like Marketing Mail {5:29}
Melanie explains that consumer sentiment toward direct mail has a huge impact on the excellent results that marketers are seeing:
- 73% of consumers have positive feelings toward direct mail, mostly because they find direct mail offers good deals for them (54%) and/or direct mail makes a personal connection with them (38%).
- Those who don’t feel positive about direct mail report having no positive feelings toward ANY marketing channels. However…
- 40% of these naysayers said they have made a transaction based on a direct mail piece over the past 6 months, proving that direct mail helps break through these tough to convert prospects
What about ages 18-39? {6:50}
Melanie addresses the frequently asked question of whether direct mail works with the younger age groups. In fact, 76% of 18-39 year-olds have positive feelings about receiving direct mail. These younger age groups beat the older generations on several direct mail transaction metrics.
Factors Crucial to Direct Mail {7:51}
Consumer behaviors and preferences dictate factors crucial to direct mail, so Melanie begins with consumer actions.
The importance of knowing when consumers are in-market
SG360°’s research looked at the most prevalent reasons consumers convert on common transactions, such as booking vehicle maintenance due to a postcard, applying for a telecom promotion, and making a charitable donation. What we found was:
- 60% of consumers who converted on a direct mail vehicle maintenance offer said they knew they needed maintenance and the mail piece encouraged them to act.
- 55% who responded to a mailed telecom offer said it was the specific price or offer that compelled them to subscribe.
- 63% who donated due to a direct mail non-profit plea said it was the organization’s cause that inspired them to donate.
Marketers need to find a direct mail partner with a powerful in-house data stack and a highly qualified data science team who can leverage the thousands of data points that are available on consumers at the household level, analyze and model that data and uncover exactly which consumers have an affinity or need for our product, service, or charitable cause, and when these consumers will be ready to act on your offer.
In addition, 51-61% of consumers said direct mail spurred them to action because they were already in market for the product or service and the mail piece encouraged them to take the final step. This reinforces the need for compelling direct mail campaigns based on retargeting signals and other intent data.
Use evolving technology {10:00}
If you’re ready to take advantage of available audience data in your own direct mail campaigns, you’ll need to leverage the technology that automates dynamic and variable data across assets and channels. 63% of marketers are already using software that allows for campaign personalization and 31% plan to be using such software in 2025.
This move toward efficient highly personalized content allows marketers to shift their focus from large volume bulk mailings to more programmatic trigger-based campaigns, as 33% of marketers said they were already doing. These marketers are 45% more likely to see larger order values from their direct mail versus other channels. {10:39}
Goal Setting and Measurement {11:15}
Melanie discusses goal setting and measurement, and the most crucial elements for efficient optimization. But not all marketers are using the most relevant success metrics. Below is the percentage of marketers who rely on each metric for direct mail attribution:
Analytics dashboard features {13:07}
Melanie takes a look at the features marketers have in their performance dashboards and finds:
- 55% real-time data
- 50% postal tacking
- 44% informed delivery
But some of the most important metrics for decision making are tracked by less than 40% of marketers:
While the complete research guide includes full details on the important metrics, Melanie shares more information on audience analysis, which is only tracked by 18% of marketers. {13:50}
Audience analysis data will show which of your audiences are not performing and why. Many marketers wait until the end of the campaign to look at financial performance, but this does not allow for an understanding of why your results were as they were. With a dashboard that tracks audience analysis, you can pull out those segments mid-stream that are not performing well and drill down on the best performing segments.
Key Takeaways
At 15:00 Melanie shares four of the most impactful takeaways for direct mail performance.
Takeaway #1: Direct mail offers better audience targeting capabilities than any other channel, and you can take advantage of it.
There are several reasons direct mail provides better audience targeting:
- Direct mail allows marketers to match-back across online and presence and residential address.
- Direct mail can leverage thousands of data elements available to build targeting models, as opposed to digital’s behavioral targeting.
- Direct mail has less competition than saturated digital channels.
Marketers can take advantage of these targeting capabilities by: {17:15}
- Working with a partner who has a multisource data stack and a data team with the expertise to create data models
- Leveraging household level data for testing to find less obvious correlations that create new target audiences
Takeaway #2: Ensure your direct mail connects with the recipients personally to increase the likelihood they will respond. {18:40}
Here is how marketers can accomplish this:
By overlaying robust third-party data onto your first-party data, data scientists can analyze and identify the most significant attributes that define who your most important customers are. They can then model this data to create detailed lookalike profiles of your best customers to be used for your acquisition targeting.
Furthermore, these data insights can inform your campaign architecture, including images, messaging and offers, across channels, creating a synchronized omnichannel campaign.
See exactly how this can look at 12:48.
Takeaway #3: Have a holdout strategy. {20:40}
Address level match-back to sales does not provide a full picture of direct mail attribution. A holdout strategy allows marketers to measure incrementality and, in absence of personalized URLs/QRs for every recipient, is the only way to confirm direct mail’s contribution to your campaign.
Yet only 37% of marketers use it.
A holdout group is necessary for every campaign. The key characteristics of an effective holdout strategy can be visualized at 20:43.
Takeaway #4 The future of direct mail is data driven. {21:49}
Now it’s time to bring all the research findings together:
Using better audience data to reach the relevant households with a dynamic message and offer will increase conversions and strip out the waste in your mailing, which will in turn lower your postage expense.
Audience Q&A {23:00}
Melanie answered several audience questions discussing topics impacting the future of direct mail, such as:
- Direct mail naysayers
- Postal optimization strategy
- How targeting has changed in the work-from-home era
- How commingling can help save your postage
Download the full Future of Direct Mail report
The Future of Direct Mail 2024 guide is available now for immediate download. Use these insights to secure your Q4 direct mail goals!
