Is direct mail dead? Nope, direct mail is alive and kicking ass! While the arrival of email could have been direct mail’s demise, brands are again making direct mail work for them with a huge upside — mainly a much less crowded space that can be more impactful as a message delivery medium. And, in terms of paid media, the average rate of return on direct mail far outperforms digital channels when done properly. Direct mail ROI is undisputable proof that mailers are worth it.
Direct mail isn’t FPS’s core specialization, and we don’t recommend that it’s appropriate for all brands, but it’s one of the bespoke, niche services that we have employed for some clients alongside our digital growth strategies, with amazing results.
Below is a case study on the direct mail program we built for a client, which averaged 815% ROI. In this case study, we will walk through the key components of the direct mail program, including testing, list, offer, format, tracking, and tools used.
Are direct mailers worth it for your brand? Direct mail is similar to digital advertising: the beginning involves a lot of testing and investment before you find the mix that works best for your brand and your product, and frankly, before you find out if direct mail is worth it for you.
We conducted several tests for the client before we found success. Test #3 was the one where we struck gold and it’s what we used after the testing phase. Tests #1, #2, and #4 are some of the tests that we ran and pivoted away from.
- List: Publicly available government database
- Format: 6x9 postcard
- Offer: Free offer for lead generation
- Takeaway: The list proved to be unreliable and, in many cases, inaccurate; without a solid list, the campaign was not successful
- List: Internal customer database
- Format: 6x9 postcard
- Offer: Free consultation for an upsell
- Takeaway: The offer required the recipient’s time, so it proved to be too complicated. Also, the format of a postcard proved to be ineffective.
- List: Internal renewal list
- Format: Letter
- Offer: Documents are due, renewal
- Takeaway: The combination of the right list, the right format, and the right call-to-action, with a sense of urgency, proved to be the right mix that generated an average of 815% direct mail ROI throughout the duration of its run.
- List: A/B split of internal renewal list
- Format: Letter without QR code vs. letter with QR code
- Offer: Documents are due, renewal
- Takeaway: The letter without a QR code had a response rate 27% higher than the version with the QR code. QR codes have an appeal because they are very trackable; however, in some cases, they complicate the process and should be tested before implementation. In this case, recipients preferred logging into their accounts to perform the transaction instead of going to a landing page via a QR code. Account login may have been perceived as a more secure option.
For this client, the best-performing list was one of existing customers who were due for renewal. We went a step further and selected only those who did not have a valid email address on file or had received the email renewal campaigns without converting. We wanted to allow email to convert the list at a lower cost first.
After a few months of testing and optimizing the mix, we rolled out an automated drip campaign that enrolled renewals automatically based on the targeting criteria we have set in the client’s CRM (HubSpot) via workflows.
A renewal offer proved to be the best approach for this channel. The mailer explained the risks of not renewing and provided simple three-step instructions for performing the transaction. The audience consisted of busy business owners and managers, so the renewal's ease and simplicity were appealing despite other options at a lower cost.
A first-class letter in an unbranded envelope performed much better for this client than a well-designed 6x9 double-sided postcard. The letter included the company logo at the top right of the page for brand recognition for current customers. The letter was brief, with simple instructions for a quick and easy read and understanding of the benefits and process. The letter had an official feel and created urgency with direct language, leading to a response rate that averaged 8.6%, which is between 4-17 times the industry benchmark.
Tracking and Results
In the first half of 2023, the direct mail ROI averaged 815% and generated well over half a million dollars in incremental revenue for the client. The testing we conducted in 2022 and the optimizations we applied allowed us to build a proven program, resulting in an average response rate and an average ROI for direct mail well above the industry benchmarks.
Conversion tracking for this campaign was done on a 45-day conversion time window. According to our direct mail platform, this is how long it could take for a recipient of a letter to convert and transact. With this in mind, reporting for direct mail is on a 45-day lag, so revenue reporting is not as instant as it is for some other channels.
Direct mail is much more streamlined now than it was decades ago. There are many platforms out there that do end-to-end direct mail pre-production list validation, printing, mailing, and even tracking. We use and recommend Postalytics for easy set-up, great support, and integrations with HubSpot and other CRMs.
Within a platform like Postalytics, you can upload your creatives, which we have done with the postcard format, or design a letter right within the platform by adding a logo, which we have done with the letter format. Lists can be uploaded from Excel and used for variable fields and personalization. We used a manual upload in the testing phases. There are also integrations available, such as integration with HubSpot, to allow automation. We utilized this for the long-term campaign. The direct mail platform also offers a list validation process before printing and mailing.
Of course, direct mail communications aren’t as instant as digital channels due to the printing and mailing process. Snail mail is still snail mail. But it has become simplified and accessible to most brands through modern direct mail service platforms like Postalytics.
Recommendations and Key Takeaways
You might be wondering, is direct mail profitable? The answer is that direct mail can be very profitable. The caveat is that you need patience. It takes more time and investment to test and optimize direct mail campaigns than some digital channels and time to get results, track, and repeat.
But if you have the patience, the success rate of direct mail can outperform digital channels and generate extra revenue for your business, accelerating growth and profitability. With our average direct mail ROI exceeding 800%, we have proven that not only is direct mail alive, mailers are worth it.
Our recommendation for this client was to continue testing to scale the program and make it one of the major revenue-generating channels for the business. Our goal for the client was to test and run campaigns at 100%+ direct mail ROI, so with a result over 8 times better than the goal, there is room to test, expand, and scale.