Direct mail - Marketing Management

Direct mail is not a new promotional tool, but it has been a major growth area. Many factors have fuelled this growth, but of particular importance in this respect have been access to more accurate, detailed and up-to-date mailing lists allied to extensive consumer database systems. Most direct mail involves the marketer sending out promotional material through the mail direct to homes or offices of target customers.

Direct mail may involve sending out technical information, notice of special offers and general information about a company and its products, and it can include free samples, questionnaires, promotional gifts and order forms, to name but a few. It may be sent to householders or to organizational buyers and directed at existing or prospective customers (this is discussed in more detail later).

Greater accuracy in mailing lists and more sophisticated databases on customers have made such mailings more cost effective. A major issue when using direct mail marketing is response rates. Response rates can be very low. In direct marketing there are estimates that response rates vary from approximately two per cent for mail shots to existing customers down to one per cent when mailing new or lapsed customers.

Direct mail campaign planners realize that one of the most critical factors in success is getting the addressee to open the envelope. Careful targeting and skill in the design of the direct mail package can significantly increase the percentage of consumers who will open the direct mail envelope and proceed to read the promotional material. Undoubtedly, direct mail remains one of the most unpopular techniques of promotion amongst many consumers. Improved techniques and increased social and customer conscience on the part of direct mail marketers, possibly backed up with an effective regulatory system, might be required if direct mail is to achieve its full potential as a constructive promotional tool.

Unsolicited direct mail is disparagingly referred to as junk mail. This derogatory term has been reinforced by the fact that the sheer growth in direct mail in recent years has meant that consumers in many developed economies are inundated with direct mail on a daily basis. Post Office/Royal Mail statistics show a continuing rise in the annual volume of direct mail and in the number of organizations using it for business and consumer communication.

A number of factors account for this increased use and acceptance of direct mail, the most significant of which is the increased fragmentation of media. There are three UK terrestrial commercial television channels as well as a wide choice of satellite and cable television available to subscribers. In the USA there are literally hundreds of commercial channels. In the print media, there has been the rapid growth of ‘freesheets’ alongside traditional local press, coupled with proliferation of special interest magazines.

This fragmentation has meant that media buyers and advertisers either have to spend more money to ensure they reach as wide an audience as previously, or spread the same amount of money more thinly over a range of media. Developments within the direct mail industry have removed many difficulties that have previously deterred large advertisers, particularly in respect of the inferior quality of large mail shots that have led to the ‘junk mail’ terminology.

IT advances have made it possible to ‘personalize’ good quality mail shots, targeted to individuals by name. There have been tremendous technical strides in all areas of direct mail, including computer aided design of direct mail material and use of mail merge software that produces results that look like letters. Direct mail uses mailing lists that have usually been purchased to target recipients considered most likely to respond positively, e.g. a person might be on a database for having an interest in rugby so will be a good target for rugby-related products. This is referred to as database marketing.

Bulk mailings are popular for businesses operating in the financial services, home computer and travel industries and also charities. Bulk mailout rates enable marketers to send mail at ecomomical rates. To effectively segment and target markets and gain best value for money, organizations are increasingly opting for the benefits of direct mail i.e. flexibility, selectivity and personal contact.

A direct mail campaign may be aimed at eliciting an immediate response, or simply to increase awareness or interest. In other words, the purpose of direct mail is very wide ranging. In essence, it represents an impersonal promotional activity sent directly to prospective customers in their own homes or offices.

A direct mail shot may consist of anything from a letter to weighty catalogues of product offerings. Regular users of direct mail techniques are the Readers Digest and the Automobile Association. It is a method of communicating a message directly to a particular person, household or firm. As such it falls under the more general heading of direct marketing, which includes many other forms of direct communication.

Direct mail and direct advertising are subsets of direct marketing. The latter consists of printed matter that is delivered by the advertiser direct to the prospect. This material is sent by mail and other means like house-to-house leaflet drops, handed out to passers-by, or put under the screen wipers of parked cars.

E-mail and viral marketing

One of the latest tools available to the direct marketer is e-mail. Most people regularly send and receive e-mails both in our homes our places of work. To a large extent e-mail has replaced the letter as a form of communication. Just like the letter an e-mail can be personalized to a particular individual and sent direct to a previously identified receiver.

Compared to communicating by post, e-mails have the advantage of being much cheaper, easier to produce and customize and have an increasing global reach. Not surprisingly marketers and direct marketers in particular were quick to spot the potential for e-mails in marketing campaigns. As a result e-mails are now a major tool of the marketer. Brassington and Pettit4 show that e-mailing is now widely used to generate awareness, attract customers to a website, extend the mailing list through third party referrals and in the context of direct marketing specifically, in some cases to generate a direct order.

Systems have been developed that can delineate and select target customers for unsolicited commercial e-mail (Moustakas et al.5). A major disadvantage of e-mail as a direct marketing tool is when e-mails arrive in e-mail boxes unsolicited. This type of e-mail from a company we have not contacted, or asked to send information, is known as ‘spam’ and has become a major problem in the direct marketing industry. Quite simply, most customers object to receiving unsolicited e-mails especially when a lot of it is for products in which they have no interest. There is now a strict code of regulation and industry practice in many countries to protect customers from the worst excesses of spam marketers (Brubaker6). Many anti-virus systems now include programmes for blocking unsolicited commercial e-mails.

Related to e-mail marketing is the growth of viral marketing. As the term implies viral marketing is based on the idea that an e-mail sent to one person may, if planned effectively, be forwarded on by that person to their friends and acquaintances so ‘spreading the message’ about a product or brand. In this way, the marketer can overcome some of the problems with unsolicited commercial e-mails. After all, we are more likely to open an e-mail if it comes from someone we know personally. In this way, viral e-mails make use of the known effectiveness of ‘word-of-mouth’ communication. The real issue for the marketer in using viral e-mail based marketing is to ensure that the initial receiver passes the e-mail on.

Marketers have used a number of devices for this, ranging from straightforward financial inducement, to the use of humour or simply inherent interest which persuades a recipient to pass the message on to others.

We are still in the early stages of using viral marketing and particularly, as shown by Cruz and Fill,7 when it comes to evaluating viral marketing efforts, but as a means of communication, viral marketing is now firmly established in the armoury of the direct marketer.

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