Direct Marketers Can Survive Five-Day Postal Delivery

The United Postal Service, trying to stem the tide of financial losses, has proposed a 5-day delivery schedule. Elimination of Saturday delivery each week would save between $2 billion and $3.5 billion dollars according to different studies. Opponents of eliminating Saturday delivery cite among their arguments that it would hurt direct marketers that rely on the Postal Service to reach their customers. The reality is that direct marketers have cut back on their use of mail as a communications channel. Direct mail volume dropped by 9 billion pieces in 2009 to 202 billion pieces.

The reduction in direct mail volume has been impacted in the short term by the recession. A long term change is that marketers are using more channels to reach their audiences, namely e-mail and social media. Eliminating one day of mail delivery will do no more harm to direct marketers than the shift to other media has already inflicted. What will be needed is careful planning to time the drop of direct mail pieces, particularly when they are time sensitive such as sale catalogs. As Hamilton Davison, president-executive director of the American Catalog Mailers Association, puts it “It doesn’t do any good to have something delivered two days after the sale is over” (no wonder he is the voice of the catalog industry with insightful logic like that… sorry, I could not resist!).

In the final analysis, if marketing mail volume continues to decrease it would not be because of a switch to a 5-day delivery schedule. And, the proposed move would not put USPS at a competitive disadvantage against UPS and FedEx in serving the B2C e-commerce market.

Response Magazine – “Five-Day Postal Week Doable for DR”

DMA Agreement on New FTC Guidelines for Testimonials, Endorsers Too Late

The Federal Trade Commission announced significant changes in October to guidelines for the practices of product testimonials and endorsers in advertising (read the FTC’s release). Among notable changes included testimonials no longer being protected by the disclaimer “results not typical.” Instead, advertisers must disclose the results consumers should expect from the advertised product. Endorsements by celebrities, bloggers, or word-of-mouth marketers must now be disclosed in terms of stating the nature of a relationship between endorser and brand (e.g., paid endorsement or endorser received free products to evaluate).

This week, the Direct Marketing Association, an industry group impacted significantly by the FTC changes, released a statement that it had approved changes to its Guidelines for Ethical Business Practices to be consistent with the FTC. While the direct marketing industry should be commended for aligning its ethics policies with federal guidelines, it is disappointing that it took the FTC’s action to bring about change. This situation is a great example of how inattention to self-regulation by an industry can lead to government regulation forcing change. If the DMA had taken the lead on these issues long ago, particularly the testimonial issue that has long been contentious, it could have had a stronger voice in setting policy.

It is almost always better for an industry to be responsible for policing itself instead of allowing regulatory agencies to dictate guidelines (at least from the industry’s perspective). In this case, the direct marketing industry either refused to believe the FTC would make changes (the existing guidelines were developed in 1980), or it failed to anticipate a new administration’s stance on consumer protection could accelerate government involvement in changing the guidelines. Perhaps other industries will learn from the DMA’s experience and be more proactive in self-regulation.

Is Direct Mail Next to Go into Decline?

The woes of mass media advertising have been well documented. Newspapers, in particular, are scrambling to remain viable to advertisers. Television is facing similar challenges, although to a lesser extent. Now, a third medium could be joining the list: direct mail. Love it or hate it, direct mail has enjoyed a run of 60 years of annual growth in overall spending. That run came to an end in 2008, as a study from the Winterberry Group reports a 3% drop in direct mail spending last year. Furthermore, direct mail spending is predicted to fall another 8% to 9% in 2009.

A series of events have aligned to create a perfect storm for the direct mail industry. First, consumers who are tired of unwanted mail solicitations can minimize them more easily through the Direct Marketing Association’s DMAchoice program. Second, a weak economy has led marketers to pull back on spending, and the relatively high cost of conducting direct mail campaigns make them a target for reduction. Third, at the same time marketers are spending less on direct mail, they are utilizing e-mail marketing more, especially when targeting customers with whom they have existing relationships (and permission to contact via e-mail). Fourth, electronic communications like e-mail are environmentally friendly instead of using natural resources to make envelopes, brochures, and sales letters.

Direct mail will not disappear from our mailboxes altogether anytime soon. But, the era of constant growth in direct mail marketing appears to be over. The capabilities of direct mail to precisely target an audience and measure its effectiveness make it a very useful tool in the IMC toolkit. But, with the emergence of e-mail and search engine advertising as ways to cost effectively reach specific audiences and measure campaign effectiveness, direct mail’s role in marketing programs will likely not be quite as prominent going forward.

Link: eMarketer – “Direct Mail Drop”

E-Mail Marketing: Opt-In Doesn’t Grant Permission to Annoy

Permission-based e-mail marketing campaigns are the only way to go in terms of building and maintaining positive customer relationships. When customers grant permission to a marketer to contact them via e-mail, it opens the way for ongoing communication that is wanted and considered more relevant and less intrusive than other media. That is, provided the content and frequency of communications are well managed.

The goodwill spawned by permission marketing programs can be hurt when e-mail messages become off-topic from what customers indicated were the types of information they wanted to receive from a company. Also, too many messages, even if they are offers for sales or special savings, can turn recipients against companies that become too aggressive in their e-mail marketing efforts.

Marketers will be put to the test this holiday season as they battle a weak economy by offering consumers many promotions to encourage purchases. E-mail campaigns driven by permission marketing can be very effective; avoid alienating people who want to hear from you by over-communicating with them.

Link: USA Today – “E-Tailers Push E-Mail Discounts to Lure Shoppers”

EMail Marketing Bloats Inboxes

Email is a highly used communications tool by marketers because it gives them an inexpensive channel for sending messages to an audience. Moreover, the audience has usually indicated a willingness to receive messages by opting-in to get emails from a company. The messages can be personalized to deliver the types of information the recipient wants such as info on sales and new products, and decline to receive info that is of no interest. For these reasons, email marketing has been a blessing. But, will it one day become a curse?

The widespread use of email marketing campaigns has led to a swelling of our inboxes. A recent study by Forrester Research found that U.S. retailers and wholesalers will send an estimated 158 billion email messages in 2008. By 2013, that number is expected to reach 258 billion. This alarming growth could lead to more consumer frustration with the volume of messages received (even with companies that they have opted-in to get their emails). Too much frustration may prompt calls for a National Do Not Email registry, similar to the popular Do Not Call registry implemented by the FTC and about 3 dozen states.

If email marketers want to avoid strict government regulations, they must become more adept at sending relevant messages. The goal should be to improve the quality and reduce the quantity of messages. The ability to access customers via their inbox should be viewed as a privelege that should not be abused with too many sales offers.

Link: Internet Retailer – “Marketing Emails Will Grow 63% by 2013 Despite Weary Conumers, Study Says”

E-Mail More Prominent in Marketing Campaigns

Results of a survey conducted by Direct magazine show that e-mail is becoming a more important marketing communications tool. Use of e-mail to communicate with both existing customers and prospects is on the rise according to the survey. 72% of the firms surveyed send e-mail to customers (up 10%), and 50% send e-mail to prospects, up 9%). Direct mail, while still a vibrant channel, declined in terms of the percentage of respondents saying they send to customers (66%, down 4%) and to prospects (59%, down 1%). Direct mail will likely face further scrutiny by direct marketers as costs to produce and mail pieces climb as well as calls from advocacy groups and some consumers to curtail the amount of natural resources expended to produce mail pieces.

The results of the survey send a clear message about the importance of multichannel marketing efforts. E-mail marketing is more prominent, direct mail will continue to have a significant role, and search engine marketing (used by 39% of those surveyed, up 10%) and internet advertising will be used more extensively. The days of advertising campaigns consisting of traditional media only are over. What is needed today is an integrated effort that can include traditional media elements such as print or broadcast mediums. Direct marketing’s inherent capabilities to measure effectiveness make tools such as e-mail, direct mail, and search engine advertising indispensible elements in today’s integrated marketing campaigns.

Link: : “E-mail Gains in Usage but Traditional DM Media Decline: Survey”

Direct Marketers Get It Right with DMA Choice

I can’t think of an industry that has more of a right to have a self-image problem than direct marketing. Telemarketers interrupting meals and TV shows or junk mail clogging our mailboxes (both physical and electronic) are not endearing images for most people. Consumer resistance to direct marketing efforts in the forms of signing up for Do Not Call lists, installing Caller ID, and using e-mail filters provides ample evidence that a lot of people do not want to deal with unsolicited marketing messages.

So what should direct marketers do in the face of this resistance? They should accomodate consumers, making it easier for them to block marketing messages. Yes, I said let’s help consumers keep us away. The more self-regulated and proactive the direct marketing industry is, the less need there is for governmental regulation. That is why the Direct Marketing Association’s announcement of its DMAChoice initiative is noteworthy.

DMAChoice will provide consumers a channel for opting out of mailing lists and offer resources to educate consumers on privacy and preventing fraud. The DMA even talks about DMAChoice being a social networking platform for consumers to interact. Don’t expect DMAChoice to become the next MySpace or Facebook, but the DMA should be commended for the DMAChoice initiative. The only criticism that can be leveled is that it has taken too long for the direct marketing industry to be more consumer-focused. The industry has been reactive, not proactive in this area, but at least strides are being made.

Direct Marketing in Your Plans for 2008?

Direct marketing may not be top-of-mind for businesses trying to develop promotion strategies. Traditional mass media advertising, maybe promotions are commonly used. The tendency to gravitate toward advertising and sales promotions is not surprising. After all, we are bombarded with these tactics as consumers.

The less experienced marketer may not be considering direct marketing tactics to reach customers, but chances are they probably should. A recent report released by the Direct Marketing Association indicates that direct marketing expenditures represents more than 50% of the total amount spent on media advertising. Given the potential for direct marketing methods to deliver measurable results of performance (e.g., mail, e-mail, and search engine marketing campaigns), we will continue to see direct marketing gain in importance. This shift will likely continue to occur at the expense of media advertising budgets.

Direct marketing may suffer from a bit of an image problem, but it works! That fact is not lost on decision makers who need accountability from their marketing investments. Link

Marketing Research: Consider the Source

I read an interesting article recently that discussed results of a study about consumers’ preferences for mail as a way for businesses to communicate with them. In particular, the study found that consumers prefer receiving certain types of correspondence from businesses by direct mail rather than e-mail (e.g., info about products and bills/statements) and they are less likely to ignore direct mail than e-mail. These findings are eye-opening for firms that use direct mail, especially firms that may question whether direct mail is a relevant medium to reach their target market.

Now, before anyone abandons their e-mail marketing efforts and shifts those dollars to direct mail, we must consider the source of the study. The study was commissioned by Pitney Bowes. Yes, that is same the Pitney Bowes that offers many products and services to the direct mail industry. The company has a vested interest in the promotion of direct mail as a viable communication tool for businesses. While the research design was no doubt sound, one can’t help but fight the temptation to nod and wink that research sponsored by a supplier to the direct mail industry would find that direct mail enjoys high preference levels with consumers… especially when compared with e-mail, a medium that poses some level of threat to direct mail. Survey research findings help businesses make more informed decisions and have the potential to be framed in a way that can influence decisions and behaviors. But, we must be careful not to blindly accept findings presented to us. Link