Dec 5, 2006
The Broadhurst Report
Pushing the Envelope
The route to continued success in the business of mail
By Guy Broadhurst
There's no arguing that mail is business-critical. It is first and foremost a key means of communication and it is vitally important as a tool for sales, marketing and maintaining customer relations. Its importance is global. And from Paris to Prague, from New York to L.A, from Tokyo to Cape Town, from Sydney to London, we're witnessing a sea of change in the business of mail. This change brings new challenges, trends and opportunities while spotlighting the enduring value of paper-based communication in our increasingly multi-channel world.
Direct Mail Transformation
From the instant a paper-based communications strategy is conceived to the moment when a recipient opens a mail-piece, and through all the steps in between. the business of direct mail is undergoing a transformation. According to Robert Coen, VP and Director of Forecasting at Universal McCann, direct mail began a rebound in 2005 and is now up some 8.5 percent. Recent legislation such as the Do Not Call List that put the brakes on telemarketers and Anti-Spam Legislation, aided by the known customer preference for paper mail, have helped make direct mail the best choice for reaching out to customers and prospects. And the volume is likely to increase. So how big is direct mail?
· In the U.S. alone, businesses spent $35 billion on direct mail in a single year, amounting to some 10 percent of all advertising and marketing spending and 27 percent of print advertising.
· Direct mail accounts for nearly 40 percent of postal volume and eight percent of printing/writing paper.
· Business to business direct mail is estimated to account for nearly half of all B2B advertising by 2010.
And despite the fact that many of us tend to throw away generic direct mail unopened and unread, direct mail remains well regarded and accepted by consumers, even in a media- and information-intensive marketplace. David Mastervich, Director of Sales and Strategy Development at the U.S. Postal Service cites two ways direct mail continues to be strong.
· 95 percent of Baby Boomers bring in mail and sort it every day and direct mail to these consumers is driving a resurgence of retail shopping.
· 85 percent of Gen X and Gen Y consumers bring in mail the day it arrives and 70 percent use coupons from direct mail and 70 percent take the time to read credit card offers.
The Accountable Media
We're seeing this remarkable growth because marketers need accountable, highly targeted communications that reach a precise demographic audiences and no other media does this as effectively. Direct mail lets them focus resources on obtaining immediate, measurable, short-term responses and provides the agility to change the offer based on response. But, there are still three main challenges--and some unique ways you can turn these challenges into opportunities to deliver more profit for your business.
Security
First up is security. Unauthorized access to personal consumer information wreaks havoc for thousands of people each year when identity thieves run up debt, freeze credit and drain savings accounts. Whether you’re a direct mail advertiser; a statement provider, or a monthly biller, you still need to get the mail out and know that your audience is comfortable opening it. Direct mailers can help by implementing controls that help protect sensitive customer data.
The good news is that Océ and other vendors have been developing faster, more secure mailing technologies for years, technologies that help you produce mail with the integrity and security you, your customers and their customers need.
Today, you can track each mail piece from production to delivery cycle, and provide an audit trail for each job, adding another layer of security to your communications. For example, Océ PRISMAproduction software combines with the latest generation of intelligent inserting equipment to ensure 100 percent data-to-mail integrity from host to post. This enables complex documents like personalized, multi-page retirement fund statements to be inserted into accurately addressed plain-faced envelopes. The USPS is also taking a leading role with initiatives like its Confirm program and PLANET Code which combine with tools like Océ Verification Manager that help track mail from printing to customer delivery and back, closing the loop to give you a secure, measurable, highly-targeted communications solution. In addition, new bar code formats are coming soon that will facilitate tracking, speed processing and delivery, and help control costs--something that's important to every mailer.
The Web and the Mail
We all use the Web and it is certainly impacting direct mail. But this impact is taking place in some surprising ways. While more and more non-advertising mail-- letters and postcards and the like--are moving to the Web, the Web is becoming a compliment to direct mail. In fact, rather than accelerating the demise of print and mail, as some so-called experts claim, the Web is creating new synergies between these channels. Offers in more and more direct mail pieces send people to Web sites for more information. In some cases these Web sites are being actually built on the fly based on facts as simple as the recipient's name, or with richer detail using highly targeted data-base driven messaging.
Such personalized sites engage both new and existing customers, especially when the information or offer is relevant to their current needs or interests. Imagine, for example, receiving a direct mail offer for new area rugs after buying hardwood flooring, or for new outdoor furniture after buying materials for a new deck or patio. Then going from the direct mail offer to a website where you can view an online catalog of goods you might be interested in.
Or consider catalogs. According to the USPS's Mastervich, the shop-'til-they-drop crowd not only love catalogs, combining catalogs and the Web equals purchases, either via phone or the Web. Some 22 percent of visits to online stores come from catalog recipients--and they account for 37 percent of sales.
As consumers and businesses alike are bombarded with marketing across multiple channels, the combined forces of relevant, targeted direct mail enhanced with the Internet is ultimately less invasive and more effective in generating additional sales and increasing customer loyalty and retention than use of other media. The opportunity is there for the taking for direct mailers to take advantage of the integration of digital print engines, secure production software and intelligent mailing systems to make significant contributions to their customers' success.
But I said there are three challenges. The third is convergence, the do-more-with-less dynamic that brings offset printing together with digital printing and marketing documents with transactional documents. It's a relentless, overarching trend that is affecting documents throughout the enterprise. There are five elements to convergence as we head into 2007 and I'll be talking about those next time.