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26Apr2018

Long Read: Does direct mail fit into your B2B marketing mix any more?

Long Reads

 

Is direct mail dying? Is it too expensive to do it properly, especially compared to the low cost of email? Is the new era of digital marketing contributing to its demise? Do we still view direct mail as junk mail?

Or, are there plenty of great opportunities out there within the B2B mix to use direct mail? Can you gain that competitive edge over companies failing to take advantage of the fact that in the current market, not many are exploring it as a tactic? Are there benefits to using some of the more ‘traditional’ marketing mediums? And ultimately, can direct mail enhance the effectiveness of sales campaigns, increasing that vital return on investment?

In this Storm12 Long Read, we investigate and interrogate these ideas, with insight from marketing managers to find out more, delving through research into direct mail and discovering its true credibility, the extent of its lifetime and its effectiveness in a sales campaign, and whether these are benefits worth our while. Providing a couple of tips along the way, we’ll divulge how, why and when to integrate it.

Also, we look at a case study based on a fairly well known digital giant, Google, and their foray into the world of direct mail.

Most outbound marketing channels are now primarily digital. Our quest to publish, share, measure and engage online has become so important, so normal and so embedded within our industry that our reliance on technology means we have forgotten the old ways. We’ve turned away from those channels which were more fun, that gave more artistic scope (away from the limitations of HTML and off-the-shelf email campaign platforms) and presented a chance to showcase our creative capabilities.

With the digital landscape now so cluttered with content, there is a void which traditional channels might be able to fill. The advantages of direct mail are clear. And, if we’re not willing to step away from the digital aspect of campaign planning completely, combining direct mail with complementary online elements could result in a stark increase in both open and engagement rates, which may ultimately equal better return on investment.

And don’t forget about the elephant in the room - GDPR. With May just about here, is there truly a difference for B2B marketing when it comes to direct mail or email? What are the implications when planning and carrying out a direct mail campaign?

As with all things GDPR, there is no quick answer, and we’re afraid that you’re not going to find it here either. You will however find some statistics and views which might surprise and whilst it may repeat marketing lessons you already know, what’s the harm in a little refresh?

So grab a cup of coffee or tea and strap yourself in for this long read.

 

 

 

 A brief history of marketing

 

Outbound vs. inbound

It’s widely acknowledged that the term ‘marketing’ was coined in the 1950s. In this postwar era, large-scale consumerism took off with a little help from marketing with print, radio and later TV offering a handful of channels for those original pioneering marketers. When you spent more on advertising, you got more. This was prime outbound marketing - marketing which is broadcast, sent one way and (hopefully) persuasive enough to elicit a response, resulting in a store visit, enquiry or sale. Some may call it push marketing. Think of Mad Men - it was a time where creativity ruled and making the most out of that moment of truth was the focus to gain that valuable emotional connection. Quite frankly, it was simple.

 

‘Social media’ arguably began in the 1970s in various mainframe networks, progressing onto internet forums in the 1980s and 1990s, with the recognisable social media platforms of today created from the late 1990s into the early 2000s. Before this, advertising was the communication of brands and the consumer - the marketing engine. No longer were there few places to advertise and successfully hold a captive audience - the noughties and the rapid rise of social media meant that we lost the golden age of advertising. Yet it brought about the rise of the importance of what is now known as content and inbound marketing. You might think this is primarily B2C, but it also concerns B2B. The advent of search and social media opened up a new world of information with feeds and rich media on demand. So where are the marketing opportunities? Well, it’s obvious to us now, but it was joining the revolution and providing the answers, blogging opinions on the subject matter and generally being in a space where your target audience were looking for answers and learning that held the key. This is where inbound marketing really took off.

 

As opposed to outbound, inbound marketing drew customers to products and services via content, social media marketing and search engine optimisation (SEO). The control is in the hands of the customer and means the conversion rate is a lot higher.

 

 

But, like all good things, there was a downside - this was a heck of a lot more complicated than just crafting an advert. This was more marketing than advertising, and it seemed that companies needed marketing just as much as they needed sales, in order to figure out the scary online maze or attract those desired leads.  

 

The advent of marketing automation 

The beginning of the end of the fax machine dawned with the introduction of emails as the main communication channel amongst businesses in the late nineties. This new medium exploded exponentially, dominating and still remaining as the ‘go-to’ for correspondence. So it came as no surprise that mass emailing programs boomed.

 

In the last ten years, integrating email with social media campaigns has become the norm. We are now at a point where sophisticated and powerful automation programs not only analyse social and online activity, but also trigger predetermined campaigns to the desired target audience through an ever increasing marketing ‘tech stack’. Whilst the principles of marketing have stayed the same, the playing field has evolved alongside this growth of technology.

 

Marketing automation works very well within the inbound marketing model. Once a prospect visits a website, engages and gives permission for you to market to them, then great! They are a lot more likely to open that email, or are they? There is a school of thought which says that due to the sheer amount of emails and information out there, your company’s download is now no different to your competitor’s, thus not standing out enough to spur any action from your audience. Subsequent emails are becoming a case of diminishing returns.  

 

But here’s the next challenge - what can you do if your target audience, premium prospects or any other suppliers do not wish to receive any of your emails or calls? What if those in senior positions don’t have time to look through social media for more information? What about your ultimate goal, the cream of the crop, the ones which would bring in the vast majority of your revenue - the top 20% of your target audience?

 

 

The B2B marketing advantages of DM - what’s the hype about?

 

But the question is, are we trying to bring back print and post from the grave? Do they have substance, or even relevance to B2B? If so, how well does it fit into the marketing mix and above all, your budget?

 

We have picked some of the most relevant stats, sense checked and discussed each in terms of how they can be put into practice in our marketing plans in order to gain that increasingly elusive ROI.

 

Of all the stats, we’re focusing on the following key aspects of direct mail vs. email (mainly because email is the current default for marketing):

 

A. Share of channel

B. The lifetime of DM

C. Open rate

D. Credibility

E. Engagement

F. Creativity

G. Sales effectiveness

 

A. Share of channel

Gone are the days of the 1960s, 1970s and even the 1980s, where the options for advertising lay in a couple of channels of communication; mail, newspaper, industry journals. Nowadays, it’s a constant plethora of feeds, streams, online portals, websites, social media and emails, all designed to grab your audience’s attention. However, chances are your target is either too busy, under pressure, has little time to take it all in, or just doesn’t want to see it.

 

Take emails for example - it’s estimated that 74 trillion emails are sent a year in comparison to 4.4 billion direct mail pieces. It’s roughly 15,000 emails for every one direct mail piece sent. That is a massive difference. A recent UK study also revealed that 70% of people claim that they receive far too many emails for their liking, which isn’t very surprising when you look at the figures.

 

Furthermore, we’re sent way more direct mail pieces at home on average than we are at work, emphasising another reason why direct mail is a wasted opportunity for businesses - think of the share you would have if you sent a campaign in the post to your target audience.

 

B. The lifetime of DM

Going by the statistics, your direct mail piece will be more likely to stick in your consumer's mind than your email. It’s estimated that direct mail will hang around for roughly 17 days, whilst if an email isn’t interesting enough, one quick swipe left and it’s in the bin. One primary reason for this could be because your target is not constantly inundated by direct mail. A good thing about emails, as an example, is that they can reach your audience immediately and don’t have to wait for it to be delivered. But it can get deleted pretty quickly as well and lacks the emotional connection that direct mail can bring. It can get people talking and ultimately sharing your business with others. As the Head of Marketing and Communications UK at ABN AMRO Asset Based Finance disclosed to us, “digital is very instantaneous, but it’s also gone in seconds and also gone from your mind.”

 

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C.  Open rate

Open rate: the golden KPI of marketing campaigns. Statistics show that direct mail has a 92% open rate, in comparison to email’s 10%-25%. Not bad.

 

You could argue that pure nostalgia could be a cause of the large open rate percentage. Think back to when you were younger and the pure excitement you felt when you had a letter with your name on posted through your door. This traditional means of marketing is not as disconnected to your audience as an email; the personal touch of direct mail is more inviting than a ping on your computer, adding to the growing junk pile of marketing emails.

 

You’ve also got the element of security, as opening something in the post won’t give you a virus or hack into your systems. Ultimately, the curiosity of a letter beats the curiosity of an email.

 

There is always the chance to assess this for yourself; through A-B testing with the most basic form of direct mail, the postcard. As a trial, send 50% of your prospective list an email and the other half a designed postcard with the same content, and measure the results. It’s always worth experimenting and seeing what works best, whilst also demonstrating the effects of direct mail in its simplest form.

 

D. Credibility

An email can feel generic and created by a computer, even if you wrote it yourself. There’s a level of trust that digital marketing seems to lack; even though they may have the same text, direct mail appears to be more credible. Recent studies found that 87% believed facts from direct mail to be more honest, whilst only 48% trusted emails.

 

You could say this is because you can tell someone put valuable time and money into direct mail, leading to 70% of consumers feeling more appreciated after receiving it, and thus a better impression of your business; the physical evidence of direct mail demonstrates that you care. As these figures have actually increased in the past few years, direct mail is seen to be less as ‘fake news’ than technological means of marketing and more beneficial for your business to be seen as credible.

 

E. Engagement

As you well know, engagement can be defined as a measurement of the extent of how much of a meaningful experience your customer has. Similar to the above, engagement can be reached better with a tangible piece of unique direct mail, rather than words on your computer. It also seems that it is a lot easier to ignore all those marketing emails, without appearing to be rude; you could argue that direct mail stands as proof of the time and effort spent by your business. Not quite guilt-tripping your audience, but it’s more courtesy that leads to a reply.

 

 

Direct mail plays an important role when engaging with your consumers; it lies in between virtual and face-to-face connection. The initial digital marketing stage allows your audience to explore and find out more about you, whilst direct mail is the crucial second point, taking the steps towards your audience once they have some familiarity of your business.

 

So your consumer has opened your direct mail - can that compete with the hassle-free ease of clicking through to a website from an email? Well, of course this is based from pure channel campaigns, using either email or direct mail as the sole means of marketing. But it highlights that you can achieve a much higher rate with direct mail.

 

If that still doesn’t impress you, our client at ABN AMRO reports that with their recent campaign, one in four phone call follow ups lead to a face-to-face meeting, all through sending quality direct mail pieces. Told you it was good.

 

F. Creativity

The most visually creative you can be with an email is probably having a few animations thrown in. However, you want to stand out, differentiate yourself from your competitors. Don’t limit yourself; with direct mail, you can involve all five senses if you wish. Make it 3D. Make it edible. Make it smell if you want to. Make it more interesting than text on a screen.

 

From a puzzle to a box of treats, sweet smelling teas or a pop up card, even something as little as the finish and texture of a postcard. The possibilities of engagement and cut-through are endless if you add the right creativity to your message. Utilise modern technology to elevate your direct mail with improved finishes and those little personalised details - it sounds cheesy, but there isn’t much you can’t do with direct mail.

 

G. Sales effectiveness

Our ABN AMRO client adds, “people don’t want to be sold to … if they feel that they’ve made the right move first by responding to a direct mail piece, then they’ve almost invited you.” This means that with the correct sales technique and clever marketing, it won’t feel like you are intruding on your target audience.

 

A creative piece of direct mail will be more welcome than an email. As long as your data is correct and accurate, there is enormous potential with direct mail. Despite it being harder to measure, more expensive and requiring follow up dedication, research shows that direct mail campaigns can produce a 12% increase in your sales team’s ROI. It’s not about competing with the sales team, however; it’s about making their life easier and complementing their performance. Our experience has been that sales love to follow up a great piece of direct mail, as it gives them a smoother way in or another excuse to chat to that lapsed client. It takes the conversation away from your generic sales pitch to a thing that is sitting on their desk. You just have to ask yourself, can you put in that little bit of extra effort in order to achieve that increase?

 

 

Using an event campaign of one of our business contacts as an example, they A-B tested email vs. a simple piece of direct mail for an invite to one of their seminars and found that they received around 25% engagement from direct mail and only 5% from emails. It just goes to show that a tangible piece of marketing can be more effective than a digital one.

 

 

Where Does DM Belong in the Marketing Mix?

 

Direct mail has been shown to attract attention and create that golden opportunity to grab your target’s attention. But where and when is it best applied in the marketing mix?

 

We have seen it thrive within a number of areas:

 

  1. That crucial new business introduction stage at the top of the sales funnel.

  2. Nurturing pending sign offs, in a bid to improve conversion rates.

  3. Reviving lapsed clients.

  4. A grand launch or promoting existing products and services (but this is predominantly geared towards your current clients and hot prospects.)

 

Like anything, this emphasises that there is no one-size-fits-all solution. What might be perfect for your target audience may not appeal to other potential customers, nor to retain existing clients and so you will get different response and conversion rates in different areas.

 

 

How does DM fit in with GDPR?

 

At the time of writing, it’s a month before GDPR implementation, bringing a sense of dread to all those that hear it. Although once you get past the scare mongering, it’s not as bad as it seems for the B2B world. It also means that direct mail has a bigger opportunity to thrive. GDPR will govern the general management of data, PECR and the pending ePrivacy Directive will control digital and electronic communication, including text and phone calls. Emails may still have the opt out function, but there is still the risk and more legislation associated with it. This all means that direct mail will be less regulated than digital.

 

With even the Direct Marketing Association’s approval for using direct mail as a viable method of re-permission marketing and all the other advantages we have covered, it’s hard to understand why anyone wouldn’t want to use direct mail going forward.

 

Consent

When it comes to GDPR, consent is a controversial issue littered with many misconceptions. Anyone not entirely clued up on the subject (don’t worry if you count yourself as one, we’re all in the same boat) may think that GDPR is all about consent, but this isn’t entirely true. Consent is one of many principles of GDPR and there are many situations where we do not require consent to process personal data.

 

However, one resounding statement from the Information Commissioner’s Office earlier this year - “you don’t need consent for postal marketing.”

 

Now, before you get too ahead of yourself, this can still be taken the wrong way; many companies may get the impression that if they solely use direct mail, then GDPR does not apply to them. But they forget that you need to comply with all the other GDPR regulations that direct mail may also need to follow.

 

As long as you follow the other principles of GDPR when processing people’s data from a B2B standpoint, identifying any risks, stating your legitimate interest and implementing strategies to mitigate and manage these, you are following GDPR.

 

If you are still bit wary of some of these statements, take a look for yourself from this report on direct marketing and GDPR from the Royal Mail.

  

 

Tips on Creating Campaigns

 

Make sure to clean, qualify and focus your audience; you’ve got to know exactly who you want to send your direct mail to. It helps to have a clear image of your ideal target consumer in mind when creating your direct mail, rather than blindly send out your pieces to an audience that you don’t want to do business with or they are flat-out not interested in you.

 

As a rule of thumb, make sure your data is up-to-date; an extra couple of checks, like a phone call, are always ideal, in order to save yourself embarrassment and money. It wouldn’t look good on you and your business if you send your direct mail piece to someone, only to find out that they left six months ago.


 

Look at Google’s direct mail campaigns, one being ‘Top Tactics for Tough Times.’ Printed as a small blue booklet with short text and graphics and consequent promotion for their AdWords services. It’s filled with effective tips either introducing businesses or helping those navigating through using AdWords productively. The general consensus on the internet is that it worked to, as people and businesses were trying the AdWords platform out. It got everybody talking; here’s a digital giant sending things in the post?! It gave people a break from the screen, leaving many questioning whether they would have read the booklet if it was sent by email. So if Google can do it, you can too.

 

Other top tips include:

  • Know your audience - drill down to a focused group of targets for whom you can create something a bit more relevant and personal. You might need some outside help to get your team thinking.

  • Send your more premium prospects your better quality direct mail pieces - goes without saying, in order to get the best, send the best.

  • Give your recipient something of value and a simple offer that is easy, uncomplicated and offers immediate value.

  • Personalise - the little details matter.

  • Get as creative as possible - use all three dimensions, texture, taste or smell. Go nuts.

  • Experiment, experiment, experiment - like many marketing philosophies, it’s always a good thing. Try out the A-B testing, that has been adopted in the digital world so well.

  • If you have a large database, tier your clients by how important they are to you and send your more thought-out and expensive direct mail to your top tier.

  • Always follow up - what’s the point of sending your work out without getting the reward? You have more time to follow up than email; three full golden weeks!

  • Have a build up/nurture process ready - depending on the marketing stage you are at with your target, you may want to build up the relationship on other channels, or follow up and nurture your audience that are engaged, but not quite ready yet.

  • Add in that all important opt out process or area for clients to enquire about their data, as specified by GDPR.

  • For a B2C client, make sure to check your data through MPS (mpsonline.org.uk).

 

 

Leveraging marketing strategies with direct mail

 

Whenever a trend re-emerges, it always resurfaces slightly different, slightly better. It’s clear to see that there is a resurgence of direct mail, a ‘retro’ trend that’s adding value to the comprehensive marketing mix. It utilises outbound techniques more strategically and creatively and presents more opportunities due to its compliance with GDPR, as opposed to the enforced regulations with email.

 

Compared to what it used to be and the advent of digital marketing, direct mail can be more personalised and targeted, and less generalised. Let your target be delighted with interesting and unique direct mail pieces, as opposed to text on a screen or a voice down the phone. Bring creativity back.

 

Don’t completely put digital marketing aside, however; integrate the two methods to maximise your results. Make it so it’s not a case of switching channels, but rather complimenting each other. On your direct mail piece, have a call back to the digital world, actively pushing your audience to engage with your website, drop an email or give you a call. Have a pathway leading up to your direct mail and a pathway beyond it. Ask yourself, where does your customer want to go next? As our client at ABN AMRO said, “it’s our little secret.”

 

We’ll probably be writing similar long reads in five years’ time, moaning about too much direct mail being posted through our doors and a call to bring back the ‘old’ ways of digital marketing.

 

See you then. 

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