PART 4: DIRECT MARKETING MEDIA cuarrer DOVElOping Direct Mail Campaigns Ata Glance: Special Characteristics of Direct Mail 266 “Junk” Mail? 267 The Classic Direct Mail Package 275 Other Aspects of Direct Mail Marketing 288 After the Successful Direct Mail Package—-What Then’? 294 Summary 295 Discussion Questions and Exercises 295 Suggested Readings 295 When most people hear the term direct marketing, they are thinking “direct mail”—mailing pieces that vary from a posteard announcing a sale to glossy packages using four-color print- ing and a variety of physical and message components. The preceding chapters have empha- sized that direct-response marketing is much more than direct mail, but direct nail is a key component of the industry—in some ways the standard to which all other types of direct- response efforts are compared. In this chapter we discuss many types of mailing pieces, but catalogs—a type that could reasonably be included under the heading of “direct mail”—have become such an important aspect of direct marketing that we treat them separately in the next chapter. Direct mail is a venerable part of the marketing effocts of major companies throughout the world. Tn the United States and Canada mail has been an established marketing channel since the early 19th century, Mail marketing also has a long history of successful use in Western Europe. In more recent years there has been an explosion of direct mail marketing 265266 PART IV. Direct Murketing Media in the rapidly growing markets of Asia and Central and South America. Today direct mail is a recognized part of the effort of marketers of all kinds—consumer, business, service. not- for-profit—throughout the world, In the United States direct mail advertising expenditures were estimated to be $34.6 billion in 1996, which represented «most 24 percent of direct marketing promotional expen- ditures. Direct marketing promotion, in turn, represented nore than 58 percent of all U.S. advertising expenditures. Special Characteristics of Direct Mail Direct mail possesses all of the special competencies discussed in chapter 1. In addition, it has some unique advantages compared to the other media of direct marketing. According to Bob Stone, these advantages are? + Selectivity. Because of the ability to rent mailing lists and to select especially desirable names from within those lists, as discussed in chapters 4 and 5, direct mail can engage in precise tar geting of identified target markets + Virtually Unlonited Choice of Formats. Direct mail is extremely flexible, allowing for a wider ange of choices of format than any other direct marketing medium, However, there are poten: tial constraints resulting from the inability of production equipment to handle some formats or excessive costs resulting from unusual formats, (These are primarily constraints on creative exe- cution, not strategy development * Personal Character, Direct mail cominunicates one-on-one with the recipient. It offers the mar- eter the opportunity to personalize the message or its delivery as desired. * No Direct Competition. In other media, readers, listeners, and viewers are ordinarily perusing the ‘medium for reasons besides consumption of the advertising. Once recipients open and read a pieee of direct mail, there is no competition for their attention for the limited period of time they are focusing on the mail, * Most Controllable. The direct mail manager is not dependent on the scheduling of other media for dissemination of promotional material. Barring error of some kind, the manager can control mail dates, the exact content of material sent, fo whom it is sent, and so on, This also means that the diseet mail medium lends itself to rigorous, statistically valid testing, + Unique Capacity to bmolve the Recipient. A wide variety of involvement devices can be nsed to stimulate and retain the interest of the recipient while a decision to tespond is being made. The direct mait medium also has some potential disadvantages that should be taken into account when considering it as a channel or as an addition to the overall marketing pro- 3 gram:3 * High Cost Per Contact. Reaching a potential customer by direct mail is generally more oxpet sive on a per prospect basis than is mass media. Keep in mind, however, that the selectivity of direct mail ean help to make up for its high unit cost. Veconamic impact: US. Direct Marketing Today, Executive Summurs, 2nd ed, (New Yorks Direct Masketing Association, 1996), 5 Bob Stone, Successful Direct Martering Methods, 6th ed. (Lineolmwoud, IL: NIC Business Books. 1996), a1S316, Based on Tain Maitland, Hove to Plan Dinect Mail (London: Cassell, 1996). 4-5CHAPTER 12 Developing Direct Mail Campaigns 267 * Time Required. The example in chapter 2 showed that even a rather small campaign involving only a ew managers and suppliets takes time, Some of the activities can be compressed or car- ried out concurrently, but quality should not be sacrificed for speed. Because most mailers use one or many suppliers, as discussed later mn this chapter, some timing issues are not emtirely with- in the control of the marketer. © Varicty uf Knowledge and Skills Demanded. Successful mail marketers mast be familiar with details ranging from print production techniques to postal regulations in cach of the countries in which they do business.4 Good suppliers can be of great assistance in the myriad technical actiy- ities involved in planning and executing successiui direct mail, but the marketer must know enough to select competent suppliers, to manage their contributions, and to make final decisions on the most technical of details. Technological developments that fall ander the general heading of “desklop publishing,” are enabling direct marketers te perform some of these activiticy in house, saving time, and in some instances, costs. Tn spite of potential disadvantages, direct mail can be successfully used for a great vari ety of objectives and many target markets. It can be used to increase the value of present cus- tomers (e.g., cross-selling or upgrading), to acquire new customers (¢.g., making initial sales or gencrating inquiries for additional information), with other relevant publics such as the stockholders of a corporation {e.g., informative enclosures with dividend checks), and with members of the channel of distribution (e.g., product and service updates). When the medium is used t0 make a sale on the basis of the mailing alone, it is cor rectly termed mail order. (Actually, direct-response advertising in any medium that closes the sale on the basis of that ad alone is also referred to as mail order) When direct mail is used for any purpose other than to clase a sale, it is correctly termed direct mail advertising or direct mail promotion. In most instances in this chapter we use the more generi¢ term direct mail. Keep in mind that when one of the other terms is used, it has a more precise meaning |? “Junk” Mai Despite the positive benefits direct mail offers to the marketer, it has a poor image in the minds of many people. It is frequently pointed out that “junk” mail is any mail that docs not interest the recipient. Presumably, then, one person's junk is another person's treasure! The task of the marketer, using the list seginentation techniques discussed in chapter 5, is to send mail to the right people and not send it to the wrong people. This will not only raise response rates and Jower costs, it will help to improve the image of the industry in the mind of the public. DMA data show that in 1995, 68.7 percent of all adults in the United States ordered something by mail or phone from offers in magazines, newspapers, on television or radio, in catalogs, or from direct mail Table 12.1 (pp. 268-271) indicatcs that overall, these respondents are more likely to be female, married, between the ages of 35 and 54, college graduates, and to have a houschold income of $30,000 or more, Respondents in the Northeast and those in professional and man- agerial jobs were also more likely to buy by telephone or mail, Clothing and magazines are by far the most frequently purchased product categories, at 22.9 percent and 23.4 percent, ‘sce Pine Desmei and Dominique Xardel, “Challenges and Pitfalls for Direct Mail across Borders: The European Example.” Journat of Dircet Marketing (summer 1996): 48-60 for a discussion of issues facing direct mailers within the European Union and between it and other countries.