Direct Mail Used to Be King – But Is It Still Viable Today?

It wasn’t so long ago that direct mail was the hottest ticket in marketing. There were dozens of studies to show that a direct mail campaign could be 300% more effective than any other form of advertising, including TV and radio ads, print ads or anything else.

Becoming a “mail order millionaire” was the dream of thousands of people. Many tried, most failed. But those who did know how to perform direct mail marketing intelligently became fabulously rich.

Then came the Internet. Today, when people hear the term “direct mail” the first thing they say is: “I thought direct mail was dead!” Or they might ask: “Is direct mail still viable?”

Well, the answer is yes. Direct mail can still play an important part – in some industries –in finding new prospects, converting them to paying customers, and making really good profits.

But certainly, the big hey day of “mail order” is over. It doesn’t take a rocket scientist to understand why. Mass mailings of sales letters, brochures or other marketing materials via “snail mail” to post office boxes is a risky proposition today.

First, it’s expensive. Let say, for example, you want to conduct a mailing of 10,000 pieces. Let’s say you are able to obtain a bulk rate on first class mailings at 35 cent each. So that’s $3,500. That’s just for postage. You also need to pay for envelops, and the sales materials you stuff inside your envelopes. You also have to buy a mailing list.

So simply speaking and being conservative, a direct mail campaign may cost 50 cents per mailing – so your need $5,000 up-front to reach 10,000 potential customers. Now, history shows that a 1- to 3-percent positive response rate is considered fantastically good for a direct mail effort. If you get 1 percent response on 10,000 mailings, that means you make 100 sales. If you get 3 percent, you make 300 sales.

Now you do the math. How much would you have to make on each sale to recapture your $5,000 investment? You would have to be selling at a net profit of at least $50 an item to break even on 100 responses. And we’re not even talking about the other costs you face – such as packaging when you fill orders, returns, lost items, and other expenses.

All this, and most folks who have attempted direct mail campaigns report their positive response rate was less than 1 percent! But wait! What if your item is so hot that it manages to generate a 10 percent positive response rate, or even higher? Well, then you are going to make a ton of cash!

The trouble is, only a tiny minority of direct mail campaigns experience robust response rates of 5 percent or higher – and today people have “Internet mind” – meaning that getting stuff in the mail seems almost boring and increasingly inconsequential. At any rate, people have always hated “junk mail.”

So you can see the risks and draws backs of direct mail are many. Still, there may yet be a place for highly targeted, well developed and intelligently managed direct mail campaigns today – not as a way to sell products directly, but as a way to support and enhance your other marketing efforts, be they Internet, TV spots, radio ads, billboards, or whatever kind of advertising you are implementing.

The bottom line is, direct mail is definitely a “look before you leap” proposition. Yes, that’s true of any marketing strategy, but times have changed drastically, and it’s important to remember that direct mail is simply not what is used to be – but can still be useful if used right.

About Allyn Cutts

Allyn Cutts

I'm a marketer, plain and simple. I'm the owner of Cutts Group, a marketing company located in the Lehigh Valley, PA. We have been serving local, regional, and national companies for more than 12 years, and we have a vast knowledge of *What's Working & What's Not* in marketing. There is a tremendous opportunity for businesses today... Since only 26% of businesses have invested any time or effort in online marketing, the market is wide open for those businesses that take the time to discover what the Cutts Group can do for them. These days, since 97% of consumer's research local companies online before making a buying decision, it is critical that businesses have an outstanding online presence and reputation, and are prepared when their prospects reach the zero moment of truth.

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