What’s Going on in Direct Mail?
Direct Mail experienced a significant resurgence of interest from brands over the pandemic. Why? Because let’s face it, it works. People were stuck at home for months on end, and the excitement of receiving something, anything, through the letterbox broke up the monotony of lockdown. And as a result, consumers fell back in love with the mail. In fact, so much so, that it is now the most trusted form of communication. It’s not surprising therefore, that engagement is up. The latest JICMAIL stats show that Direct Mail frequency of interaction has increased to 4.55.
Most notably this uplift has been driven by younger audiences for Direct Mail, with 25-34, 35-44 and 45-54 year olds all interacting with mail more than they were a year ago. Item reach is now 1.12 and the lifespan of a DM piece now stands at over a week (7.4 days), meaning that it stays in the home for this amount of time before going on to be recycled.
So, with engagement and volumes on the up, what other trends can ambitious direct mail business owners capitalise on?
Trend 1 – Permission
In May 2018 marketing changed. GDPR was introduced and overnight businesses lost the ability to contact around two thirds of their databases. Legitimate interest notwithstanding, there has been a significant push from brands to improve their standards relating to permission and opt-in. And it’s a good job too since the new ICO has made it clear that he will take a hard line to non-compliance.
It is however therefore that direct mail businesses who are able to help organisations preserve their permissions data will be offering far greater value than those simply fulfilling a direct mail campaign.
Trend 2 – Quality
The DMA reports 20 million items of mail are incorrectly sent each month in the UK costing mail users over £300 million annually. But it isn’t just about the cost, consumers are becoming increasingly conscious of poor data management by the brands they interact with. A study by Data IQ revealed that 70% of consumers expect their data to be right every time, while 32% of consumers suggest they ‘regularly’ receive duplicate messages.
The same report suggests a staggering 92% of companies find some element of managing data to be challenging and therein lays the opportunity. As consumer expectations rise and brands become less confident about the information they hold on them, forward thinking direct mail businesses should be promoting their data services to the very fore of the commercial conversation.
Data Services and Lean DM
Evolving your fulfilment focused, production-led direct mail business to capitalise on these trends of permission and data quality may seem like a daunting challenge. That is why The Software Bureau has developed the Lean DM program. Borrowing from the renowned ‘Lean Manufacturing’ revolution popularised by Toyota, Lean DM is about identifying and eliminating the 5 sources of waste within a direct mail campaign, and it is already getting great results from its adopters.
The Big Boys are Already Doing It
With lots of staff and heavy capital equipment to pay for, you would think the larger direct mail businesses would remain entrenched in production for as long as possible. However already we have seen restructuring around data-led services becoming more prominent within many of the larger mail production operations.
The Bottom Line
The issues of waste, data quality and permission will continue to dominate the transformation of the direct mail industry over the coming years. Business owners who choose to ignore these trends will face increasing commoditisation and price pressure, while those ambitions business owners who endeavour to evolve and capitalise on these trends are likely to win the spoils of higher margins and sustainable growth.