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Marketing Insights

Should Direct Mail Still be Part of Your Marketing Mix?


by
G. David Dodd, Principal
Point Balance

• Some marketing experts advocate abandoning direct mail in favor of newer


digital marketing channels such as e-mail, search marketing, blogs, and
social media.

• This article explains why most companies should think twice before
eliminating direct mail from the marketing communications mix.

The practice of marketing is changing in fundamental ways. Tried-and-true


marketing and advertising platforms like television and print ads don’t work as well as
they once did. At the same time, technology has created new marketing channels and
enabled marketing techniques that would have been impractical or impossible only a few
years ago. While all of this is occurring, CEO’s and CFO’s are demanding that
marketers demonstrate the value of their activities and programs. Therefore, decisions
about what marketing channels and techniques to include in the marketing mix have
become critical, both for company success and for marketers’ job security.

One major trend in marketing is the dramatic shift from traditional to digital marketing
channels and techniques. Winterberry Group, a widely respected consulting firm serving
the marketing and advertising industries, says that from 2007 through 2009, spending on
mobile marketing increased at a compound annual growth rate of 30.0%, spending on e-
mail marketing grew at an annual rate of 20.8%, and search marketing increased at an
annual rate of 11.6%. Over the same period, spending on direct mail fell at an annual
rate of 10.7%, and spending on print advertising declined by almost 20% per year.

This trend shows no signs of abating. Winterberry


Spending on digital Group estimates that spending on digital marketing in
marketing in 2011 will be 2011 will be about 21% higher than in 2010, while
spending on direct mail in 2011 may be up 1-4%
21% higher than in 2010,
compared to 2010. Within digital marketing,
while spending on direct mail
Winterberry Group expects substantial spending
may be up 1-4%. growth in 2011 on mobile marketing (29%), social
media marketing (27%), and search marketing (22%).

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Marketing Insights
To a large extent, digital marketing is growing at the expense of traditional marketing
methods, including direct mail. In a recent survey by Forrester Research, 60% of
marketers said they would fund increases in their digital marketing budget by shifting
money from traditional marketing programs. Forty percent of survey respondents said
they expect to cut direct mail spending, 35% indicated they would reduce newspaper
advertising, and 28% said they would decrease magazine advertising.

The move away from direct mail reflects a growing belief that (a) digital marketing
methods are essential to creating engagement with today’s Internet-savvy prospects,
and (b) direct mail has become less effective as a marketing tool. Proponents of this
view argue that both consumers and business buyers have fundamentally changed how
they seek and gather information about products and services. The Internet has put a
huge volume of information about most products and services at the fingertips of
potential customers, and they’ve become convinced they can find whatever information
they need, whenever they need it. These empowered buyers pay little attention to
unsolicited marketing messages, and therefore all forms of “interruption” marketing—
including direct mail—are losing effectiveness.

So, as you think about how to develop an effective marketing program for your
company, you need to ask two important questions.

• Has direct mail outlived its usefulness for my business?

• Should we abandon direct mail in favor of newer digital marketing tactics


like e-mail, search marketing, blogs, and social media marketing?

For now at least, we believe that most companies should answer “no” to both
questions. No one doubts that digital communication channels are here to stay. Digital
marketing techniques are already important for many companies, and they will become
more important in the future. Some companies have moved entirely to “inbound” digital
marketing with great success, but we’ve also seen several companies end their direct
mail programs only to restart those programs because of falling sales.

Every company is different, and an “all digital” approach to marketing will work fine
for some. But we believe that it’s too soon for most companies to completely abandon
direct mail. The reasons are simple: Direct mail still works when it’s done right, and it
can perform some marketing jobs better than digital marketing alternatives.

The proliferation of marketing channels and techniques gives marketers more ways
to reach out to potential customers than ever before. At the same time, however, it’s

Copyright © 2010 by G. David Dodd 2


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Marketing Insights
never been more important to know how your potential customers prefer to receive
marketing communications. The truth is, your ideas (or ours for that matter) about how
marketing messages should be communicated don’t really matter. What counts is what
your potential customers want, and you must be prepared to communicate with potential
buyers in the ways they prefer in order to make your marketing effective.

Recent research shows that many people still prefer to receive marketing messages
via direct mail rather than through other communication channels. For example, in a
survey conducted earlier this year by ICOM, over 2,500 U.S. consumers were asked
about how they prefer to receive information about a variety of products and services.
The survey specifically addressed health products and services, household and personal
care products, travel, insurance, charitable causes, and financial services.

In every product or service category except


More consumers in all age travel, more consumers said they prefer to receive
groups prefer to receive marketing communications by mail rather than by
marketing communications newspaper inserts, e-mail, or the Internet. This
preference existed in all age groups. For example,
by mail than by newspaper
18-34 year olds strongly preferred to receive
inserts, e-mail, or the marketing messages via postal mail and newspapers
Internet. rather than by online services such as social
networking platforms.

The ICOM survey also revealed that consumer channel preferences are driven by
several factors, including convenience, trust, richness of content, and environmental
concerns. What may surprise some is that direct mail scored high on most of these
factors. For example:

• Seventy-nine percent of survey respondents said they find direct mail more
convenient than digital alternatives. The respondents who expressed a
preference for mail said they can read postal mail whenever they want, they can
refer back to mail when needed, and they can easily take mail with them and
pass it along to others.

• Direct mail materials ranked in consumers’ top five most trusted sources of
information. Online information sources other than company websites ranked
very low in terms of trustworthiness. They occupied the last six positions on a list
of sixteen alternatives.

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Marketing Insights
This research makes two important points. First, it shows that potential customers
are using a growing number of sources to gather information regarding the products and
services they might want to buy. And second, it demonstrates that many potential
customers continue to prefer receiving marketing communications via direct mail.
Therefore, to reach and engage these prospects effectively, companies will need to use
an integrated, multichannel, multi-touch approach to marketing that includes direct mail
in the marketing communications mix.

If you’d like to discuss how an integrated, multichannel marketing program can boost
sales for your company, contact G. David Dodd at 931-707-5105 or by e-mail at
ddodd@pointbalance.com.

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