What’s Going on in Direct Mail?
It seems direct mail has had somewhat of a renaissance over the last 12 months. Royal Mail’s Mailmen campaign has been doing a sterling job providing statistics & research. There has even financial incentives to lure organisations to add direct mail to their marketing mix. However, the underlying decline in absolute volumes continues. PWC suggest by 2023 direct mail will be just over 4bn items, down from over 10.5bn items in 2005.
So if the future of the direct mail is not to be driven by volume, what trends can ambitious direct mail business owners capitalise on?
Trend 1 – Permission
Late last year RNLI announced its intentions to move to an opt-in-only policy for fundraising communications. This landmark decision was soon followed by the likes of Cancer Research UK, the 6th largest UK charity by income. Other high profile charities followed suit as the news of Olive Cooke’s suicide and a media backlash, finished off by the Etherington Fundraising Review has left the industry fumbling to improve standards relating to permission and opt-in.
GDPR has been the other hot topic for data users with stringent permission governance requiring dramatic changes to data handling. It is currently unclear exactly what Brexit will mean for GDPR and the UK in legal terms, however the DMA’s external affairs manager Zach Thornton suggests ‘whether we have the GDPR or not, we will have data protection policy essentially equivalent to the GDPR.’ It is however clear 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 recent Data IQ and Experian report suggests 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 this year we have seen GI solutions announce its restructuring around data-led services and DST Output pulling out of direct mail production altogether to focus on data services.
The Bottom Line
The issues of waste, data quality and permission will continue to dominate the transformation of the direc t 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.