At the end of the Nineteenth Century, 100,000 prospectors struck out for the Klondike wilderness in search of gold. Although a third reached their destination, just 4,000 came away with their prize. It was a poor return that today’s digital marketers might do well to remember.
Like most other industries around the world, financial services has joined the digital marketing gold rush. In pursuit of new customers, UK brands alone were predicted to spend £1.6bn on digital marketing during 2018; well over 10% of the national total (eMarketer). It’s understandable. There are relatively low costs of entry with digital campaigns – particularly for paid search advertising, or pay-per-click (PPC) – and much can be automated.
But things are changing. Google and its search rivals have seen brands from all sectors falling over themselves to invest in PPC. Adhering to the laws of supply and demand, the online media giants have gradually inflated prices. One study showed PPC costs more than doubled per keyword between 2014 and 2016 (Hochman Consultants). Meanwhile, the forthcoming EU Privacy and Electronic Communications Regulations (PECR) might further rein in digital marketing.
Champions of traditional marketing – like me – believe digital’s loss can be direct mail’s gain.
From the last post to a new dawn?
There’s a widely accepted marketing myth that the cost of running a direct mail campaign far outstrips digital fees. With search engines putting up their prices the gap is closing fast. It’s true that mail isn’t the cheapest medium. However, the fact that financial services is one of a handful of sectors where products can command high margins makes post an attractive prospect.
The number of mailings the average British household receives has dropped from around 60 to merely a handful a week. Conversely – perhaps because it has become something of a novelty to consumers – it’s also growing in popularity. According to recent research from the Direct Marketing Association (UK), a third of consumers say direct mail is the most effective channel when brands want them to buy products or services (DMA Customer Engagement Report 2019). Small wonder – there are lots of benefits, and here are just a few:
Good prospects. Mail is great at persuading people who are already enthusiastic about your brand to take the plunge and buy. Response rates range from 10 to 30 times higher than those for digital marketing. Moreover, including mail in the marketing mix can boost response to other channels used in the same campaign by a fifth (Marketing Metrix). With digital, conversion rates and lifetime value are low.
Mail loves digital. There’s evidence to suggest (not least from the UK’s new industry measurement bodyJICMAIL and Royal Mail) that using mail and digital together can significantly boost engagement and response: by up to 62%, in fact. So it’s not wholly about ditching one for the other; the two (and other channels) can work in harmony. It’s what those in the know refer to as the tongue-twisting ‘complementarity’.
The long game. There are fewer industries with more complex propositions than financial services. The good news is that brands can simplify their products with several pages of finely crafted copy. Mail doesn’t suffer from the restrictions of the classified ad-like search results page so, ensuring you stay relevant, you can make your point in a more explanatory fashion.
Mailing data is king. If PECR is set to make digital marketing more difficult, the recently implemented EU General Data Protection Regulation (GDPR) seems to be having the opposite effect. The new laws have forced marketers to clean their databases, so those turning to mail can do so safe in the knowledge that the vast majority of their customers and prospects want to receive their postal communications.
Beyond the doormat. It might sound surprising, but mailpacks garner on average eight minutes of attention from each recipient – a figure digital marketers can only dream of. And it’s not just welcomed by the traditional over-55 audience; DMA (UK) research points to mail’s resurgence among 16- to 34-year-olds. Don’t forget to target them.
It’s time for mail to make a return
In all of this, it’s important to realise that creating direct mail isn’t as simple as it looks.
But it’s worth the effort. The return from a well-crafted mailing is astonishing. Simply by changing the copy and the stuff inside the envelope you can see 50% improvement in response. I did a mailing for a wine company that produced no less than an 80% uplift. Nothing else changed – just the way you tell the story.
Yet writing well is hard. A four-page letter will turn off most recipients after a few paragraphs if the copy is flabby and functional, even if they are interested in the product.
And think about making sure you use the postage you’re paying for. A C5 window envelope with a couple of sheets of paper inside is like booking a 60-second TV commercial and only running a 15-second ad in the space. Why leave the blanks? You’re paying for it – and the more information you get into that envelope, the better the result you’ll get.
Another common mistake is the missing call to action. Get to the point right away, tell the consumer what they need to do and repeat the command often. Above all, be creative.
In their quest for quick wins, brands began to overlook tried and tested methods, rushing online and leaving behind the humble mailpack. Now, market forces are making many marketers reconsider direct mail. Will you be one of those who pushes the envelope?
Global Banking & Finance Review
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