Return on Investment: Direct Marketing v. Non-Direct Marketing
- In 2008, every $1 spent on direct marketing advertising resulted in $11.63 in direct marketing driven sales, on average. Conversely, every $1 spent on non-direct marketing advertising resulted in average sales of $5.24.
- By 2013, direct marketing ROI is expected to improve to $12.30 per ad dollar spent. Non-direct marketing ROI is expected to remain flat at $5.23 in sales per ad dollar spent.
Source: The Direct Marketing Association (DMA), The Power of Direct Marketing, 2008-2009.
Direct Mail Drives Consumers to Contact Businesses
The 2008 DMNews/Pitney Bowes survey on consumer attitudes and behaviors related to direct mail finds that:
- Close to 40% of consumers surveyed have tried a new business for the first time because of information received via direct mail.
- Nearly 70% report renewing a relationship with a business after a period of time because they received a direct mailing or promotional item.
Direct Mail in the American Household
- More than 80 percent of households either read or scan advertising mail sent to their household1
- When asked about their intended response to advertising mail, 27 percent indicate they will respond or might respond to standard class mailings (e.g., catalogs) and 19 percent state they will or might respond to first-class mailings (e.g., credit card offers). The higher the income, the higher the average number of potential and definite responses2
- Nearly seven out of 10 respondents like getting mail about new products from companies they do business with.3
1. United States Postal Service (2007). Household Diary Study.
3. Sorce, P. (2002). Relationship marketing strategy (PICRM-2002-04). RIT Printing Industry Center.
Which one of the following makes a difference as to what direct mail you open?
Vertis Communications’ Customer Focus survey asked adult consumers the above question. The results:
|Timing of the piece arriving coinciding with need for the service/product||67%|
|Consumer’s name on the front of the envelope||66%|
|The package looks interesting||60%|
|A special offer or discount||54%|
|The package looks important||52%|
|Feel something in the package||51%|
|A free gift or token inside||42%|
|Dated material enclosed||35%|
|None of these||5%|
Source: 2008 Vertis Customer Focus® Direct marketing 2009:Retail DM
Even Younger Demographics Prefer Direct Mail
Contrary to conventional thought, young professionals ages 18-34 proclaim nearly a two-to-one preference for receiving product information (e.g., coupons) by direct mail over e-mail or online.
Privacy is reported as one of the main reasons for this surprising partiality.
Source: Chief Marketer article by Peter Meyers, vice president of ICOM Information and Communications.
Direct Mail is the Leading Purchase Decision Influencer for Internet Users
Nearly two thirds of US Internet users surveyed in ExactTarget’s “2008 Channel Preference Survey” said e-mail is their preferred channel for written communications between friends, followed by text messaging, but the channels they use to communicate with friends are not necessarily also preferred channels for marketing.
Asked to judge the acceptability of various channels for marketing purposes on a scale of 1 to 5, respondents give direct mail an average score of 3.9, followed by e-mail at 3.7. All other channels average fewer than 3.
Nearly two thirds of those surveyed say they have made a purchase because of a marketing message received through e-mail. More than three quarters say they have made such a purchase in response to direct mail.
Direct Mail vs. E-Mail
Within the marketing departments of America, there is significant debate about whether e-mail or direct mail is the best way to get marketing messages to customers, prospects, and contacts.
Direct marketer proponents argue that people don’t like spam and will not tolerate spam. What’s more, almost everyone believes that most e-mail is spam. The cry of direct marketing proponents is loud—”We must use direct mail to get our message out!”
Meanwhile, e-mailers are on the other side of the fence. Their message is that people “opt in” to relationships—messages are not spam if people ask for them, and there’s nothing wrong with trying to save money on printed direct mail costs.
In the recently published DMA Statistical Fact Book, the answer was that both media need to be used. 79% of marketers use e-mail while 75.4% use printed direct mail pieces. From a percentage of revenue perspective, e-mail earns 21.6% and direct mail contributes 29%.
In today’s world a combination of both E-mail and Direct mail is almost a requirement to improve marketing return on investment. The key is ensuring that you are delivering a relevant message and a meaningful offer that is targeted toward the right market segment. Companies also need to determine how to make the two methods complementary while maintaining consistent marketing messaging.Content provided courtesy of InfoTrends
2008 DMNews/Pitney Bowes Direct Mail Survey
More than 8 out of 10 survey respondents (85%) say they review their USPS mail daily.
- Two thirds of the consumers surveyed said they are examining their mail more closely for coupons and offers than they did a year ago.
- Half of all respondents say they have requested promotional materials from companies over the past six months. Direct mail is the preferred way to receive offers.
|Medium||Preferred Method for Receiving Promotional Materials|
- Nearly 94% of consumers surveyed say they took action on promotional offers and coupons received via direct mail over the past year.
- Close to 40% of respondents say they have tried a new business for the first time because of information received via direct mail. Nearly 70% report renewing a relationship with a business because they received a direct mailing or promotional item.
- Respondents state that information received via direct mail often lead to contributing to a non-profit organization for the first time:
|Age Group||% Donating for First Time|
|40 to 49||41%|
|18 to 39||37%|
The 2008 DMNews/Pitney Bowes survey shows that targeted direct mail remains a key channel in reaching consumers and influencing their purchase decisions. “Direct mail induces consumers to touch the offer — recipients of mail are receiving, sorting, reading, and using direct mail to make purchasing decisions.”
As reported in the 2008 DMNews/Pitney Bowes Direct Mail Survey in DMNews, “Staying Power,” December 1, 2008.