It Takes Two: Study Touts Direct Mail, But Adds That It Works Better With Email
An imposing 74% of marketers agree that direct mail delivers the best RIO, response rate and conversion rates of all channels, according to 2023 The State of Direct Mail, a study by Lob, working with Comperemedia.
That may be why 58% are increasing their direct mail spend this year, with 16% significantly increasing it. Indeed, most firms devote up to 25% of their marketing budgets to direct mail.
But it does not stand alone. Of the firms polled, most use email along with direct mail — by a wide margin over other channels. They utilize:
- Email — 72%
- Paid Social — 46%
- National TV — 34%
- Newspaper & Magazine — 31%
- Podcast — 25%
- Organic Social — 21%
- Earned Social — 19%
- None—it is used as a stand-alone tactic.
Moreover, email and direct mail are often connected in the workplace. Responsibility for direct mail campaigns falls on:
- Dedicated marketing manager/team that owns direct mail — 34%
- Owned by email/digital marketing teams — 29%
- Customer/retention marketing teams — 15%
- Growth marketing teams — 11%
- Individual campaign managers/teams — 10%
In addition, use of automation for direct mail is highest when the email/digital team is in charge. The automation rates are:
- Owned by email/digital marketing teams — 38%
- Dedicated marketing manager/team that owns direct mail — 31%
- Customer retention marketing teams — 18%
- Individual campaign, managers/teams — 9%
- Growth marketing teams — 4%
That last point is critical, given that only 40% of marketers use a technology platform to execute direct-mail campaigns.
What’s more, 66% of direct-mail senders are unable to measure ROI, leading one to question whether snail mail really delivers the highest rate of all channels.
How do firms measure direct-mail ROI? Those that automate their direct mail track:
- Individual customer activity within a specific time period — 52%
- QR code — 55%
- Personalized URL — 52%
- Orders for featured products/services — 47%
- Coupon code — 37%
- Dedicated phone number — 46%
- Generic URL — 28%
Except for Generic URL, for which the sides are tied, non-automated firms are far less likely to use these metrics.
Direct mail suffers from these challenges:
- Poor response rates—36%
- Bad address data—32% (Up from 25% in 2022)
- Budget constraints—26%
- Lack of personalization and customization — 25%
- Inability to verify addresses — 24%
- Creating a compelling offer — 22%
- Inefficiencies and/or redundancies — 20%
- Lead and production timelines — 19%
- Workflow complexities — 17%
- Inability to target campaign delivery times — 16%
- Limited bandwidth — 14%
Predictably, retention campaigns are the most popular and effective: Companies use direct mail for:
- Customer retention — 30%
- New customer acquisition — 28%
- Customer advocacy/referral — 21%
- Dormant/win-back — 20%
Lob partnered with Comperemedia to survey 250 professionals who work in firms with +1,000 employees.