customer paying online

With Direct Mail, The Leverage is in The List

According to Forbes, U.S. advertisers spend $167 per person on direct mail to earn $2,095. That’s 1,300% return on investment. Furthermore, average response rates for direct mail are 3.7% compared to 2% for mobile, 1% for email, 1% for social media, and 0.2% for internet display.

So how does one achieve these great returns? Traditionally, many marketers have assumed that direct mail campaigns have followed “The 40-40-20 Rule” suggesting that 40 percent of a campaign’s success is in the target audience or mailing list, 40 percent is the offer and 20 percent is the creative.

Meanwhile, in a typical direct marketing budget, the data behind the list might account for about 5%-10% of the overall spend—compared to printing costs, design, postage and other considerations.

So if your data is approximately 10% of your budget but amounts to at least 40% of your success… Sounds like you better figure out how to optimize that list to get the best bang for your buck.

Luckily, there are a number of ways to optimize a mailing list before your next direct mail campaign.

Get Good Data: Ensure that you are mailing to a clean, high quality, up-to-date, and accurate list. Mailing an old or outdated list will result in lost money on mail that is never delivered, or that reaches the wrong audience. If you’re using in-house file, invest in data hygiene to keep your list in top shape. If you’re seeking outside data to build an audience, partner with a data provider that multi-sources their data to be sure you’re reaching the right people with your message.

Find the Right Triggers: When consumers move, get married, have children, separate, or enter into other major life events, their needs and subsequent purchase behaviors change. Include mover or life stage data as part of your direct mail campaign to identify and engage current and prospective customers during these important transitional periods, so you can reach consumers when they are in-market for your goods or services.

Segment Your Audience: Lifestyle overlays provide valuable insights regarding your current and prospective customers that allow you to create hyper-custom audiences, unique to your campaign or message. Using key lifestyle or demographic overlays will allow you to isolate segments of your audience to target your offer—extending the viability of your campaign.

Use Predictive Modeling: Take your audience a step further by utilizing response or cloning models to identify the people who are most likely to respond to your offers or otherwise behave like your best customers.  Rather than spending resources on random targets, with predictive models you’ll save time and money while attracting consumers who are most attracted to your brand, message and offer.

Don’t Neglect Multichannel – No marketing message lives in a vacuum. While direct mail can have a large impact on its own, it is even more effective as part of a multichannel campaign—combining direct mail with digital media increases response rates 118%. When you launch your direct mail piece, it is important to have content across other channels to support your message and capture leads that would otherwise fall through the cracks.

Want to know more about the benefits direct mail can bring to your marketing programs? Read our High-Performance Direct Mail Marketing One Sheet to learn why you should be considering direct mail as part of your marketing mix.