Direct Mail To Remain Tops for Customer Acquisition

Marketers are expected to spend more on direct mail campaigns this year. Even as this channel is being pressured by digital formats, direct mail is still seen as the most highly effective way to win new customers. But more marketers are combining this format with digital efforts in their campaigns.

In 2010, businesses spent $44.9 billion on direct mail campaigns. And in  2011, direct mail should see a 5.8% increase to $47.8  billion. This growth rate is impressive but the compound annual growth rate (CAGR) will be lower than it was in pre-​recession years. In comparison, spending  in direct response broadcast TV will reach $25.4 billion this year while marketers will shell out $31.6 billion in direct response digital.

For now,  direct mail, both catalog and non-​catalog, is considered to be the most effective driver of new customer acquisition. On a scale of 1–5 here’s how surveyed marketers rated several forms of marketing for effectiveness in new customer acquisition:

  •  Direct Mail, Non-​Catalog: 4+
  • Direct Mail Catalog: 4+
  • Search: 3.75
  • Events: 3.25
  • Social: 3.00
  • Online Display 2.9
  • TV/​Radio: 2.9
  • Email: 3
  • Print newspapers/​magazine: 2.75
  • Mobile: 2.5
  • Out of home: 2.5

Audiences are growing increasingly fragmented and new technologies are making the world of direct marketing more competitive when it comes to acquiring new customers. Analysts at Winterberry Group point out that direct mail campaigns can succeed when the following strategies are used:

  • Data: Marketers will realize better results when they use proprietary lists
  • Delivery: Applying the output from data analytics, marketers can improve results by targeting various groups in a list with specific offers and by using triggered campaigns that coincide with events such as first purchase or anniversary of first purchase.
  • Format innovation: Turning to something new such as dimensional mail is more likely to attract consumer interest and increase chances that they will read what has been delivered.

For now, the direct mail format remains the best way to attract new customers. Marketers are likely to start using data analytics to better target parts of their lists with specialized offers in order to improve results and ROI on their investment.

[Source: The Future of Direct Mail in a Changing Economy. Winterberry Group. June 2011. Web. 5 Oct. 2011] 
Kathy Crosett
Kathy is the Vice President of Research for SalesFuel. She holds a Masters in Business Administration from the University of Vermont and oversees a staff of researchers, writers and content providers for SalesFuel. Previously, she was co-​owner of several small businesses in the health care services sector.