Direct Mail

The Direct Mail Coach – Steve Fowler

This blog is written and focused specifically for the Retail Business Owner and/or those on their staff who handle the Advertising and Marketing. Why? Because this industry is the one I enjoy and know the best. I’ve spent over 20 years in the trenches working daily with many of the largest retailers in the county as well as countless independents, chains and mom & pop retail shops and services.

I’ve learned first-hand that direct mail is the most effective channel for customer acquisition and the best revenue generator for retailers. The national brands understand this and most use it very well. But many of the smaller chains and independents either don’t understand the power of direct mail, think it’s too expensive or don’t utilize it very effectively.

Another thing I’ve learned, over and over again in the retail industry is that “time is money”. My hope for this blog is that in a short time you may gain some useful tips or information that may help save some time & help you bring in revenue.

Today’s topic:

It’s not rocket science

Yes, I’ll start with a few basic but very important secrets regarding direct mail for the retail industry.

Secret #1 – It’s not rocket science!

Any successful retailer can do it

 This will upset many agencies and consultants but it’s my professional opinion that any successful retailer can do it..

 This blog is aimed at small to mid-sized retailers. Most successful retailers already possess the traits required execute a successful direct mail campaign. Don’t let the “advertising” mystic mislead you. Direct mail is not “brand awareness”, direct mail is not “image building” and direct mail is not “hard to understand”. It’s simple math.

Direct Mail Marketing is

NOT GENERAL ADVERTISING

This is why most agencies should not design your campaign.

IT IS NOT BRAND AWARNESS

IT IS NOT IMAGE BUILDING

IT SHOULD NOT DESIGNED BY COMMITTEE

IT IS NOT MASS ADVERTISING

 

IT DOES NOT HAVE TO LOOK GOOD

IT DOES NOT NEED TO WIN AWARDS

IT JUST NEEDS TO WORK!

Did you know that most of the “awards” presented to consultants or agencies in direct marketing are not even judged on how successful the mail piece was?

Question to ask if someone shows or mentions an “award” that they have received for Direct Mail.

How much money did it generate?

1. What was the response rate?

If they can’t answer either one of these questions without any hesitation, do not do business with them.

These are the only 2 THINGS THAT MATTER

Revenue Generated and/or Response Rate

It’s to the point. Its straight forward “Retail Basics” It’s about you creating “tractable” revenue into your store, website, mail box or home.

If the mail piece did not make you money or if it did not generate the response you projected (Although money is #1 sometimes all you need is response, such as a “seminar, event or lead generation) it was not successful.

Now lets discuss the basics.

I bet you have already handled a successful direct mail promotion.

Don’t let anyone, a consultant, an agency, a vendor, or even a friend con you into thinking that direct mail marketing is too complicated or technical for you to do or coordinate yourself. If you are running a successful retail business you are best suited and most likely have already acquired the skills and processes that are required and needed in a successful mail program.

Note that I said a “successful” retail business.  Unfortunately the majority of retailers who probably need this information the most will not ever read this. Many are just uncomfortable trying something new or even reviewing or learning if what they’re doing is on track.

This is why I like retail. “Successful” retailers have learned to create the perfect blend of art and science. From purchasing a brand new and untried product from a “gut reaction” at the buyers market and then calculating and adding exactly the right mark up, knowing where and which shelf to place it on, setting up the display by the door to achieve the maximum exposure and knowing which of your customers will most likely buy it.

So the transition to direct mail will be a natural one for you.

The general consensus is that direct marketing can be boiled down to only three parts and in this order: The list, the offer and everything else. The success of your project is 40% List, 40% Offer and 20% everything else. I do subscribe to this theory as well however my belief is that the offer should be the number one priotity.

1. The offer or event (What’s the benefit for you customers)

2.   The list (Who to mail? Customers or Prospects?)

3. The vehicle (Letter, postcard, self-mailer or e-mail)

2014 National Postal Forum – March 16-19

The 2014 National Postal Forum was held at the Gaylord National Hotel in National Harbor Maryland, a few miles south of Washington, DC.

The National Postal Form is the premier event for anyone involved in the mailing industry or any business that relies on mail as a vital part of their marketing mix.

The theme for the National Postal Form this year was “Stronger Together”. The focus is on bringing value through education, collaboration and new innovations in technology. 

With over 150 workshops across 21 specific categories, round table and other specialized sessions, as well as Postmaster Patrick Donahoe’s Opening Session and a large exhibit area to explore, a lot of information was packed into these 4 days.

This is the first time I’ve been to the National Postal Forum. I have heard about this event for many years but I never took the time until now.  I’m glad I finally made it. 

 I had the NPF brochure with all the classes and sessions for at least a few months but I had only picked out the first day of classes. I decided I would pick out the rest of my agenda once I arrived and got a better idea of what to expect. Well, it was hard to pick out the sessions, as there were so many choices plus no class was repeated. I picked out most of the sessions later the first day but still left a few time slots open until the last minute.

 The classes were slotted into 4 overall categories. Marketing, Preparation & Support, Professional Development & Specialized. I ended up attending 17 sessions and enjoyed most of them. The classes I attended were all very well organized and informative. Printer stations were handy to print out slides show presentations for each class if you wanted and a nice NFP app was made available for smart phones, which I used constantly. 

Of course the mailing industry is an older industry and the demographics were to be expected, not many young attendees. I met many attendees that have been going to this event for 15- 20 years. But unlike some of the other industry or printing events I’ve been to in the last few years, this event actually had an optimistic feel to it. I also found networking opportunities every day and met a lot of nice folks. The event was topped off on Wednesday night with a dinner show and a concert featuring the group America.

This event was well worth attending and being an active member of a PCC it was truly a valuable resource. If you’ve ever thought about attending the National Postal Forum but haven’t made the commitment yet, I encourage you to take the step. 

The next one will be held in Anaheim, California, look for more information at npf.org

The Top 10 Things You Should Know About the U.S. Postal Service

 

10.

The Smithsonian Institution’s National Postal Museum is dedicated to the preservation, study and presentation of postal history and philately. The Museum, located in Washington, DC, was created by an agreement between the Smithsonian Institution and the United States Postal Service in 1990 and opened to the public in 1993. In 2013, the William H. Gross Stamp Gallery — the world’s largest gallery dedicated to philately — opened its doors. The gallery provides an experience available nowhere else and offers something for everyone, from casual visitors to experienced collectors. For more information, go to postalmuseum.si.edu.

9.

The phrase by Herodotus etched atop the James A. Farley Building in Manhattan — “Neither snow nor rain nor heat nor gloom of night stays these couriers from the swift completion of their appointed rounds” — is not the official Postal Service motto. The Postal Service does not have a motto.

8.

The Postal Service is environmentally friendly and is a respected sustainability leader. It promoted sustainable practices long before doing so was encouraged, mandated or governed.

7.

The Postal Service is the only organization in the country that has the resources, network infrastructure and logistical capability to deliver to every residential and business address in the nation.

6.

The Postal Service has the country’s largest retail network — larger than McDonald’s, Starbucks and Walmart combined, domestically.

5.

The Postal Service can and does compete with the private sector — and it collaborates with it, too. UPS and FedEx pay the Postal Service to deliver more than 470 million of their ground packages to residences, taking advantage of the Postal Service’s expansive delivery network. The Postal Service pays UPS and FedEx for air transportation, taking advantage of their comprehensive air networks.

4.

Mail is a great communication tool. No monthly plans. No signal outages. No roaming charges. Regardless of geographic location, anyone can send a letter for just 49¢ to anywhere in the United States, its territories and U.S. military and diplomatic installations worldwide.

3.

Mail is reliable, trusted and secure — more than 200 federal laws protect the sanctity of the U.S. Mail. These laws are enforced by the U.S. Postal Inspection Service. U.S. Postal Inspectors are federal agents, mandated to safeguard the nation’s mail — including the people who move it and the customers who use it.

2.

The Postal Service continues to improve customer service by increasing access to postal services online, on smart-phones and in the places people visit every day: grocery stores, drug stores, ATMs and local retailers.

And most importantly…

1.

The Postal Service receives NO tax dollars for operating expenses and relies on the sale of postage, products and services to fund its operations

This information came from http://about.usps.com/who-we-are/postal-facts/top-10-things-to-know.htm

2014 Facts and figures about your Postal Service

Both literally and figuratively, the U.S. Postal Service delivers for America.  Even in an increasingly digital world, the Postal Service remains part of the bedrock infrastructure of this nation’s economy, serving its people and businesses and binding the nation together.  Postal Facts tells our story in an interesting and fun way.  

 

Size and Scope

The Postal Service delivers more mail to more addresses in a larger geographical area than any other post in the world. The Postal Service delivers to nearly 153 million addresses in every state, city and town in the country. Everyone living in the United States and its territories has access to postal products and services and pays the same postage regardless of their location.

By the Numbers *

67.3 billion — 2013 revenue, in dollars

158.4 billion — number of mailpieces processed

40 — percent of the world’s mail volume handled by the Postal Service

1.8 billion — dollar amount paid every two weeks in salaries and benefits

489,727** — number of career employees

137,037** — number of non-career employees

31,135 — number of Postal Service-managed retail offices

211,654 — number of vehicles — one of the largest civilian fleets in the world

1.2 billion — number of miles driven each year by mail carriers and truck drivers

38.8 million — number of address changes processed

41.2 — percent of retail revenue from alternative access channels

1.1 billion — total number of visits to usps.com

83.4 million — number of inquiries handled by the Postal Customer Care Center

873.3 million — dollar amount of online stamp and retail sales at usps.com

47.6 million — number of Click-N-Ship labels printed

510.2 million — total revenue, in dollars, from Click-N-Ship label purchases

107.5 million — number of packages picked up using Free Package Pickup

5.3 million — number of passport applications accepted

94.9 million — number of money orders issued

457.6 million — amount in revenue from 2,500 postal Self-Service Kiosks, in dollars

70,000 — number of stores, banks and Self-Service Kiosks that sell stamps

773,882 — number of new delivery points added to the network in 2013

152.9 million — total number of delivery points nationwide

73 — Patrick R. Donahoe, 73rd Postmaster General

0 — tax dollars received for operating the Postal Service

*all information based on 2013 data, unless otherwise noted

**as of January 21, 2014

 

2012 USPSMOBILECOMMERCE AND PERSONALIZATION PROMOTION

USPS is offering it’s mobile barcode promotion again in 2012.

It’s actually a great program. You can receive a 2% discount on your postage on mailers meeting the Mobile Commerce and Personalization Requirements from July 1st – August 31st.

Registration begins May 1st

The 2011 Mobile Barcode Promotion was successful in generating increased interest in the use of mobile technologies in direct mail. The Postal Service would like to continue to encourage mailers to integrate new mobile technology techniques into direct mail.Mobiletechnologies continue to be one of the fastest growing marketing sectors and marketing resources will be increasingly diverted to this medium. As technology changes the marketinglandscape, the Postal Service must ensure that direct mail continues to be a relevant part ofthe marketing mix. By encouraging customers to adopt and invest in technologies that enhance how consumers interact and engage with mail, we fundamentally improve the longterm value of the product which will provide substantial benefits in future years.

The 2012 Mobile Commerce and Personalization Promotion provides business mailers with an upfront two percent postage discount on Standard Mail® and First-Class Mail® letters, flats and cards (presort and automation) that include a two-dimensional (2-D) barcode or print/mobile technology that can be read or scanned by a mobile device. The technology must lead the recipient to either:

1. A mobile optimized webpage that allows the recipient to purchase an advertised productor service on the mobile device. The entire purchase and checkout experience must be mobile optimized.

OR

2. a mobile optimized and personalized web page that is tailored to an individual recipient.For each mail recipient, the web address and content of the web page must be unique.

II. PROGRAM PARAMETERS

Registration Begins: May 1, 2012 for participants (mail service providers will be able to register at a later date)

Program Period: July 1 through August 31, 2012

Discount Amount: 2% of eligible postage. The mobile barcode discount is calculated in PostalOne!® and applied to the postage statement at the time of mailing. The 2% discount is deducted from the postage amounts of qualifying product categories that are paid at the time of mailing. Normal postage prices as listed in the published Price List (Notice 123) apply to the mailing and the discount is applied to those prices.

Eligible Mail:

Standard Mail® letters and flats

Nonprofit Standard Mail letters and flats

First-Class Mail® presort and automation letters, cards and flats

Ineligible Mail: First-Class Mail paying single piece price

Periodicals (includes Pending Periodicals mail)

Bound Printed Matter

Media Mail

First-Class Mail and Standard Mail parcels

Additional Eligibility: Mailing may only qualify for one mailing incentive or promotion. TheFull-Service discount may still be claimed and workshare/entry (NCD/SCF/DDU) prices still apply.

Residual Pieces: If residual, single piece First-Class Mail pieces are included on the postage statement of presort and automation mailings, the mailing will not be disqualified from the promotion, but the residual pieces will not receive the discount. (Normalpostage prices – as listed in the published price schedule – apply to the mailing, and the 2% discount is applied to the qualifying product category postage prices – at the line-item level of postage statement – at the time of mailing.)

FOR MORE INFORMATION & REGISTRATION REQUIREMENTS click here www.usps.com/mobile-barcode

Social Media is not direct marketing

Should social media be judged by direct marketing standards?

Direct Marketing has a specific purpose.

Direct marketing is designed to create instant response or specific revenue goals.

It is not public relations, brand advertising or even customer relations though it can help to enhance and add to any of these areas.

Direct marketing is easily measurable and can and should be judged on its performance.

Social media is more like public relations, brand advertising & customer relations though it can help to enhance and add to direct marketing projects.

Social media is not easily measurable and should not be judged on its direct marketing performance.

Social media does not, and cannot replace direct marketing.

QR Code Offer

Here’s a great offer available from the Postal Service from July 1st through August 31st, USPS is offering 3% OFF of postage on direct mail pieces containing a mobile barcode (QR code). This promotion is the latest and actually a good idea. It’s designed to help entice mailers to test mobile barcodes on their direct mail. A QR code (mobile barcode) is a 2 dimensional barcode that is scanned and read by a smart phone.

Program Details The program runs from July 1, 2011 through August 31, 2011 and is available for First Class, Standard and Non-Profit Mailers who incorporate a two-dimensional barcode either on the face or inside every piece in the mailing that is designed to direct the user to a promotional website. Mailers will receive an upfront 3% discount on postage for mailings that meet program requirements. Program Requirements

• First Class, Standard and Non-Profit mail is eligible.

• All mail pieces must include a mobile two-dimensional barcode on the face or within the mail piece. • The barcode must be used for marketing purposes only.

• Postage must be paid via permit imprint and all postage documentation must be submitted to the USPS electronically.

• Co-mailing customers are eligible to participate in this program.

For more information on the promotion, https://ribbs.usps.gov/index.cfm?page=mobilebarcode

Every Door Direct (EDDM)

Here’s a wonderful use of EDDM – Every Door Direct Mail.

When Randi Slocum’s dog Kaylee ran away from her Stillwater, NY home, Randi’s mother, Carolyn, decided to try Every Door Direct Mail to notify residents in Stillwater and nearby Schuylerville, NY, of the dog’s disappearance. The flyer helped unleash a series of phone calls, and that helped lead to Kaylee’s safe return.

A happy ending and a neat story. So is EDDM a great new option from USPS? 

It may be a new option for looking for lost pets, neighborhood civic notices & other small quantity door hanger material distribution like pizza or chinese food menus, but I do not see a real benefit of this simplified addressing option.

Here’s my view on EDDM as published in April’s edition of DMAW – MARKETING AdVents

“Every Door Direct” – A Hard Sell

As most of you know, USPS started a new Simplified Addressing format called “Every Door Direct Mail” targeted to small businesses. Advertised benefits include: delivery to every address in a selected area, reduced costs and time-to-market, and the elimination of puchased mailing lists or the printing of specific names and addresses on mail pieces.

Foregoing mailing lists and even the need to inkjet addresses on mail pieces altogether sounds interesting. To qualify, mail pieces must meet Standard Mail “flat” requirements.  But the simple fact is that the new format will not save much when compared to printing a traditional tri-fold at saturation rate. But even if it does end up saving a few pennies it will not be good for our industry and here’s why.

Every Door Direct is simply mass advertising, which has caused problems in our industry for years.

I’ve been selling direct mail services for more than 2 decades and I’ve spent much of this time trying to convince businesses that mass marketing or shotgun approaches to advertising are not very efficient or effective. Targeting & measurability are the main powerhouse traits of direct mail that have a clear advantage over any other media. I believe the post office should be embracing and promoting the strongest benefits of direct mail.

Why would USPS want to promote another mass mailing service? 

I do agree that there are some exceptions where saturation mail is beneficial. But overall the more un-targeted pieces people get in the mailbox, the more likely they will be to ignore targeted mail, diluting response rates and and negatively affecting our industry in the long run. Don’t they know that this may actually discourage people from using direct mail rather than encouraging them to do so?

Plus when the focus is on saving money in the production of direct mail we lose. Direct mail is not cheap, and never will be a cheap form of advertising. We need to focus instead on how direct mail can be very beneficial and actually make money for the small business owner.

Will Every Door Direct really increase revenue for USPS? In my opinion it will not. I also predict that Every Door Direct will probably just fade away without much notice.

I understand it was launched with good intentions and we all know the post office needs revenue, but my advice to USPS is to spend less time and money trying to “sell” direct mail and concentrate instead on improving delivery and customer service. This will actually do much more to generate growth and new business.

Coupons & On-Sale purchases at record highs

According to a recent Nielsen survey “On-Sale” Items and “Coupon” purchases are at record highs.

Retailers are seeing this trend across the country. It’s having a noticeable effect on virtually every category and size of retailer.

70% consumers are buying items “On Sale”

59% consumers are using “coupons”

37% consumers are shopping at “value retailers” such as dollar stores & super centers

35% are purchasing Value packs

25% are shopping closer to home or work

18% are switching to cheaper health & beauty products

17% are purchasing smaller packages with a lower unit price

However, this is actually good new for retailers who understand direct marketing. The climate is ripe for great direct mail response.

In this economy customers welcome relevant and timely direct mail offers. They will respond to credible offers and incentives that have true value.

Just make sure you offer real incentives and real value.

In direct marketing, incentives have always worked well, but they work only when they are “real” incentives. Plus make sure that your “offer” is exclusive to the promotion and custom to the media. When you offer the same incentive on TV, Radio &/or Newspaper the offer can be diluted and your project will under perform.

When a customer feels that their particular “coupon” is really not necessary to actually receive the advertised offer, they will perceive it as worthless. Remember don’t use direct mail advertising as “branding”. Use it correctly as a sales tool and it will bring in much needed revenue.

What will my Response Rate be?

This is one of the most common questions I hear when working with someone new to direct mail.

But it’s comparable to asking me “How much weight will I lose if I go on a diet?”

Here are some guidelines that you should remember.

1-     Success of a direct mail project is not always dependent on and should not be judged by response rates alone.

2-     The most often quoted response rates throughout the industry suggest a possible 1% – 2% response. This of course is assuming you have a good list and a good offer. And this may vary depending on others factors as well including industry, timing & competition. I’ve had projects that were considered successful that received everywhere from .03% to 60% response rates.

Here are 2 points to consider when figuring out the projected results needed for your retail direct marketing program.

1-How much does your product or service sell for?

2-What is the life time value of a new customer?

If your item is a $20.00 pizza, a $1,000.00 service contract or a $273,000.00 Aston Martins DBS the response rates on each will be vastly different.

Here’s an example:

What if you mailed 10,000 direct mail pieces to a targeted list for each?

Let’s just say that this mailing cost you $4,000.00

1. $20.00 pizza

You will need a little over a 2% response to break even. But even a somewhat smaller response may still be financially beneficial when factoring in the customer life time value.

2. $1,000 service contract

If you get .5% response (just 1/2 of 1 percent response) this will result in $50,000.00 in revenue.

3. $273,000 Aston Martin

If you only get a .003% (3 tenths of 1 percent) response rate into the showroom for a test drive, it will most likely be considered a success. Even if they don’t initially sell a car they will have 3 qualified and interested individuals to start a relationship with and odds are they will eventually sell one.

So when I here this question;

“What will my response rate be?”

I respond by saying

“That depends on many factors. Let’s talk about your list and what your offer is first.”

Wedding Invitations by email?

Would I send my wedding invitations by email?

Even though email wasn’t really around when I got married I will answer this question as if I was getting married in this day and age.

No I would not send wedding invitations by email.

Here’s why

A wedding invitation is not just an announcement; it’s a personal invitation to close friends and family.

I want everyone to receive it

#1 (List)

I don’t have everyone’s current email address. Many are outdated email addresses plus many have multiple email addresses. Even if I get in contact with everyone and get the correct emails, I know some of my older relatives don’t even have a computer. I also know that some of my friends never or rarely look at their email.

I want this wonderful moment to be shared and hope everyone attends

#2 (Offer)

It’s a celebration of one of the most personal moments and event in my life. It’s the first statement of our new life together. Close friends and family will want to know about this. Most will enjoy coming out to the wedding and reception as it’s a happy event and time for any family. Even if they won’t or can’t come to the wedding, I want them to know that we took the time to let them know about the wedding and personally invite them.

I want our personal touch

#3 (Other)

The look of the card, the feel of the paper, the tissue and envelopes will reflect our personality together. It’s the first statement of our life together. Our first communication as a couple should convey quality and sincerity. We want to make it stand out. We will use a first class stamp and even handwrite the addresses so everyone knows they were personally invited.

Really there is not much I’d change about our invitations after all these years, even if we were sending them out today. The only thing I would add is to include a way that they can RSVP online.