DIRECT MAIL DATA: A CRITICAL PIECE OF TODAY S OMNICHANNEL MARKETING JIGSAW PUZZLE

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1 DIRECT MAIL DATA: A CRITICAL PIECE OF TODAY S OMNICHANNEL MARKETING JIGSAW PUZZLE Omnichannel marketing is all the rage, but if you re not adding direct mail data to the mix, you re missing out on five valuable opportunities. Sponsored by:

2 TABLE OF CONTENTS page 3. Introduction page 4. Five Opportunities That Direct Mail Data Provides Marketers 1) Gain control & greater visibility 2) Predict & trigger customer actions 3) Determine the best channel for delivery 4) Drive a positive customer experience 5) Create an omnichannel strategy page 9. Two Best Practices Worth Heeding page 10. Closing Thoughts

3 INTRODUCTION RESPONSE RATES: 3.4% DIRECT MAIL.12% Marketers are facing unprecedented pressure to justify their investments. At the same time, there are more channels than ever organizations can use to connect with consumers, including direct mail, , newspapers, mobile, radio, social networks, and TV. Deciding what approach is, most likely to deliver the best results can be an overwhelming exercise. Today s omnichannel universe adds an extra layer of complexity as more and more marketers orchestrate communications across channels to drive consumers to purchase, often within a given time frame. But for all the pressure to justify marketing spend, and all the hoopla surrounding social media, direct mail tracking still stands as a time-tested strategy for targeting valuable customers and measuring campaign effectiveness. In fact, according to a study conducted by the Direct Marketing Association, the response rate of existing customers to direct mail is 3.4%; compare this to the 0.12% response elicited by marketing s workhorse: . A Ritter s Communications report reveals that 50% of people pay more attention to direct mail than to any other advertisement medium. THE ADVANTAGE OF DIRECT MAIL With direct mail, marketers can determine with precision when a particular coupon or promotional offer will arrive in a customer s mailbox. Armed with this direct mail data, organizations can better time their campaigns across channels for maximum impact. For example, if it s known that a customer will receive a direct

4 INTRODUCTION mail coupon on Friday, a marketer can deliver an blast first thing Saturday morning encouraging the consumer to hurry and take advantage of the offer. The result is a cost-effective, omnichannel marketing campaign that delivers real results. In addition to triggering customer behavior, direct mail data also lets marketers justify their marketing spend and assess the quality of their campaigns. This is accomplished by such actions as linking the coupon used in a direct mail campaign to a specific sale, or connecting the dots between the timing of a campaign and an uptick in sales. Better yet, savvy marketers are finding new ways to bridge the gap between traditional direct mail marketing and trendy digital strategies for a more complete view of their omnichannel marketing efforts. There are myriad ways marketers can use direct mail data to get a more complete view of their omnichannel marketing efforts and improve their results. The top five are: 1Gain control and increase visibility Predict and trigger customer actions Determine the best channel for delivery Drive a positive customer experience Create an omnichannel strategy

5 1. GAIN CONTROL AND INCREASE VISIBILITY Imagine a company that decides to run a large direct mail promotional campaign that features three coupons: 1) a 20% discount if the consumer shops on Friday; 2) a 30% discount if the consumer shops on Saturday; and 3) a 30% discount if the consumer shops on Sunday. There once was a time when a marketer would simply slip these direct mail pieces into the postal system and hope that they arrived in time for consumers to take advantage of the three-day campaign; or that they d at least arrive in time for one of the three-day cou-

6 GAIN CONTROL AND INCREASE VISIBILITY pons to have an impact on sales. But that s all changed. Thanks to direct mail data, a marketer can now determine when a logistics company will unload their trucks at the post office, what day an item will be placed into the postal stream, and when a mail piece will land in a customer s mailbox. MARKETERS CAN GAIN BETTER CONTROL OF THEIR CAMPAIGNS AND INCREASE VISIBILITY GET TRACKING By tracking this information, marketers can gain better control of their campaigns and increase visibility into the outcomes of their various direct marketing efforts. And it s precisely this visibility that s helping measure campaign effectiveness. Did consumers only start trickling into stores on Sunday because of inclement weather on Saturday? Or did they not receive their direct mail pieces until Saturday afternoon? With direct mail data, marketers can find the answers to these important questions. MAIL FEEDS DIGITAL Another advantage is the ability to tie direct mail efforts to digital initiatives. For example, a retail marketer looking to drive instore purchases during a specific promotional period can time the receipt of a direct mail piece to coincide with an blast. With the right data, marketers can forecast exact in-home delivery dates, know when to follow up with an or serve a display ad, and get customers in-store exactly when they want them there.

7 PREDICT AND 2. TRIGGER CUSTOMER ACTIONS Predictive analytics aren t the only way to predict customer actions. Direct mail data can, as well. And, it can do something analytics can t: trigger customer response. On its own, for example, exit scan knowledge reveals what day a marketing piece will be delivered to a consumer s home. But when connected with data from other channels, it can be a powerful way of predicting and triggering customer action. By using software to report on mail delivery, a marketer can immediately start to shape the next steps in a

8 PREDICT AND TRIGGER CUSTOMER ACTIONS customer s buying journey. Consider, for instance, an electronics retailer that is about to open a new location. With mounting competition from e-commerce sites, the company needs to successfully drive new and existing customers through its brick-and-mortar doors. In the past this retailer would have to take its chances by delivering a direct mail piece a few days in advance of a store opening and hope that its arrival would coincide with the event. TRIGGER WITH PRECISION Not so with exit scan knowledge. Using it, marketers at that retailer can know exactly when a direct mail piece will exit the Postal Service s chain of custody. In response, a retailer can better synchronize promotional offers with actual events, thereby significantly increasing the chances of driving customers into the new store location. A retailer can better synchronize promotional offers with actual events

9 3. DETERMINE THE BEST CHANNEL FOR DELIVERY Direct mail marketers will spend months agonizing over a single comma or quibbling over colors until, eventually, they turn to split testing. One approach, A/B testing which involves testing the exact same direct mail piece except for one changed element in two separate versions is an excellent way to reveal what s working, and what s not working, in a campaign. Yet, when it comes to evaluating the effectiveness of digital campaigns, marketers often fail to apply the same vigor. Part of the issue is that most marketing campaigns are relatively easy and cost-effective to deploy. As a result, many marketers choose to repeatedly blast the exact same message regardless of its actual return on investment. In fact, some marketers react to low response rates by sending the same , but to a wider swath of recipients, aiming to gain more traction. In the end, though, the same old content is recycled time and time again without careful consideration of its business value.

10 DETERMINE THE BEST CHANNEL FOR DELIVERY NOT MORE, BETTER It is time for marketers to invest the same energy in testing digital channels as they do vetting direct mail. Certainly, it s easy to spend endless marketing dollars on lower-cost channels such as and social media. But direct mail continues to outperform other channels. One reason: about 45% of household heads read direct 45% READ DIRECT MAIL IMMEDIATELY mail immediately according to the USPS. The trick is to evaluate direct mail campaigns and measure digital efforts using performance metrics such as conversions. Using A/B testing of digital and physical marketing communications to track consumer response, marketers can better determine the best delivery options across all channels. Consider, for example, a real estate brokerage that wishes to inform local neighborhood residents of upcoming home sales, as well as entice potential homebuyers with offers of a free home estimate. Careful A/B testing of several direct mail pieces reveals that images of homes with luxury swimming pools are more likely to attract potential clients than homes with manicured lawns. At the same time, A/B testing of an marketing campaign shows that 8 a.m. is the best time to send an to busy prospects. By leveraging this information, the real estate brokerage firm can better determine what channels are most likely to generate the greatest interest, what images will receive the most clicks, and how quickly to follow up the delivery of a direct mail piece with an campaign.

11 4. DRIVE A POSITIVE CUSTOMER EXPERIENCE According to Forrester Research Inc., customer experience accounts for 47% of loyalty, while price and value contribute only slightly to capturing consumers repeat business and emotional brand connections. For marketers, this means having to perfect their approach to keeping customers happy while guiding them successfully along their path to purchase. That s no easy feat. These days consumers have grown accustomed to receiving the products, services, and prices they demand, all in real time. Fortunately, direct mail data can help marketers meet consumer expectations and significantly improve the customer experience. On a practical level, using direct mail data to ensure delivery of online purchases is one way to do so. For example, customers who order online may mistype their address, sending a coveted item to the wrong address or causing it to be undeliverable. By automatically

12 DRIVE A POSITIVE CUSTOMER EXPERIENCE conducting an address check against direct mail data with each order, retailers can avoid unnecessary lost or return to sender pieces, as well as angry customers who may not have realized the error was theirs. CONNECTIVE TISSUE Direct mail data can also help more closely link a retailer s Web presence with its brick-and-mortar customer experience. For instance, a cosmetics manufacturer may create a direct mail campaign that encourages customers to visit its website to learn more about a new product and then receive a coupon code that can be used in-store within a particular time period. The company can then follow up the direct mail piece with an message CUSTOMER EXPERIENCE ACCOUNTS FOR 47% OF LOYALTY reminding recipients to visit its website. Additionally, direct mail data can help harmonize the timing of event-related campaigns and avoid the frustrations of mistimed messaging. If a direct mail piece arrives five days prior to an actual event, chances are recipients will ignore the offer. On the other hand, if consumers receive the direct mail piece a day after the event, followed by an outdated reminder, they ll likely become angry or frustrated. Either way the result is a poor customer experience, and a potentially disgruntled or lost customer all of which could have been avoided by using direct mail data to coordinate the timing of direct mail and digital communications for online or in-store events.

13 5. CREATE AN OMNICHANNEL STRATEGY Many marketers think it s cheaper and easier to reach customers via and social so they funnel marketing dollars into those channels. But it s not an omnichannel approach if you don t consider each and every channel. Certainly, is a cost-effective means for reaching customers. But direct mail can also provide unprecedented visibility into the customer journey. Linking these two worlds is an unstoppable way to increase sales. So, how can marketers make sure they re delivering an omnichannel experience? For starters, many marketing organizations are divided into distinct disciplines, such as the direct mail team, the team, the social team. This organizational structure

14 CREATE AN OMNICHANNEL STRATEGY leads to disjointed efforts and data silos poorly integrated bits and bytes of information scattered across a company. But pulling this data together, and synching it across channels, can help foster a single, comprehensive view of campaign effectiveness. Take, for example, a clothing e-tailer that begins to receive an onslaught of complaints from customers regarding late shipments. The problem could stem from a bottleneck in the supply chain. Or perhaps the customer provided the wrong address. Or maybe the website promised a delivery date that wasn t feasible. In the past the e-tailer had no way of knowing the true source of the problem. OVERLOOKING DIRECT MAIL DATA CAN IMPEDE MARKETERS FROM GETTING THE ANSWERS THEY NEED GETTING TO THE SOURCE OF THE PROBLEM Luckily, data that s been gathered from multiple online- and offline channels (e.g., from e-commerce and to direct mail and in-store purchases) and integrated into a single repository, can point to the real culprit be it a struggling supplier, a typo, or a miscalculated delivery date. Overlooking direct mail data can impede marketers from getting the answers they need. Conversely, armed with this information, a marketer can make more informed decisions as to how they can resolve issues or proceed with a particular campaign, all from an omnichannel perspective. And it s this smarter decision-making that leads to an enhanced customer experience.

15 TWO BEST PRACTICES TO HEED Marketing campaigns are only as effective as the data that drives them. That s why identification and enhancement are key ingredients in any omnichannel marketing strategy. Carefully cleaning a consumer s address to remove errors or inaccuracies can greatly increase the likelihood of a direct mail piece being delivered in a timely manner. The same rule applies to e-commerce: customer names, addresses, credit card information all of these details must be accurate for a seamless purchasing process and an outstanding customer experience. Another best practice that marketers should adhere to is to blend online and offline customer data. All too often, retailers brick-and-mortar locations and their e-commerce sites are treated as if they re two separate companies with distinct customer bases. Rather, marketers need to ensure that e-commerce operations and brick-andmortar locations share their data, linking vital customer records so the physical and Web presence for an individual is one and the same.

16 CLOSING THOUGHTS offer. Advantages include the ability to: 1. Gain control of and increase visibility into marketing efforts. 2. Predict and trigger customer actions. 3. Determine the best channel for the delivery of communications. 4. Drive a positive customer experience. 5. Create an omnichannel strategy. The fanfare surrounding and social media marketing can make investing in them a tempting proposition. But while there s plenty to be gained by attracting customers through those channels, it s important to remember that direct mail has plenty to Together, these five outcomes enable marketers to effectively orchestrate omnichannel marketing initiatives, improve campaign performance, and increase sales.

17 GrayHair is an industry leader in solutions that improve response and return on investment for a wide range of marketers. The company s solutions concentrate on investment services, banking, insurance, retail, credit card services and government agencies. GrayHair s experience helps provide the right marketing lens to identify campaign needs in essential areas such as vendor management, industry-specific compliance, cost management, postal delivery and omni-channel management. GrayHair provides critical services through its managed platform, SelectSolutions which provides postal services, omni-channel reporting and consulting services. For more information please visit GrayHairRetail.com