Print+Promo 2019 State of the Industry Report: Will direct mail win the battle against digital?
For Print+Promo’s 2019 State of the Industry Report, we dug deep to measure print industry health, learn how policies from the Trump administration are impacting print and promo, and find answers to questions, like: Which verticals are poised for growth?
As part of our investigation, we reached out to experts in various market segments: printed forms, labels, promotional products and direct mail. Below is an excerpt from my conversation with Chris Lien, president of BCC Software, Rochester, N.Y. Find out what he had to say about the current state of direct mail, postal reform and areas of opportunities for marketers.
What are your thoughts on the current state of the direct mail sector?
Chris Lien: We continue to be encouraged with increased response rates in direct mail. According to the 2018 Response Rate Report from the ANA, the average response rate for a direct mailpiece exceeds 5 percent. We believe this reflects two important trends.
First: Address quality. The reduction in undeliverable-as-addressed mail continues for those companies who are astute enough to recognize the importance of address quality. Second, direct mail is somewhat immune to digital fatigue and thus continues to be an important channel for direct marketers who are trying to rise above the cacophony of digital noise.
We are also encouraged with the Postal Service’s attempt to bridge the physical and digital with its Informed Visibility initiative. The daily email preview of physical mail arriving later that day holds exciting promise for progressive direct marketers seeking a multichannel solution. However, what is concerning is that the Postal Service is attempting to rely on its own strength when it comes to multichannel messaging. As of now, the USPS has not yet fully embraced the entire mail supply chain to realize its vision. While Informed Delivery subscribers have continued to increase, campaign management, data connectivity and leveraging the data still appear to be lacking. The USPS cannot do it alone. It cannot successfully bridge High Tech and High Touch without leveraging the supply chain.
There have been multiple attempts made to revive the ailing postal system (from the 2017 Postal Service reform bill that lost key sponsorship and never advanced, to the 2018 Postal Service Reform Act [S. 2629]). Do you think postal reform will get the serious consideration it deserves this year?
CL: We are encouraged and thankful that the president appointed—and the Senate confirmed—two governors for the USPS Board of Governors. Moreover, we are thankful that the Postal Regulatory Commission has a full slate of commissioners.
We are doubtful, however, despite the recent changes in Congress, that any meaningful postal legislation will move forward, given all of the other issues facing Congress today.
While the recent postage rate increases may have been in-line with what the mailing industry would expect, there’s certain to be discomfort felt in some categories. Can you expand on this and offer any advice for direct mailers?
CL: The Postal Accountability and Enhancement Act—the law passed in 2006—does cap postage rates according to CPI per class of mail. This was the predictability of pricing that the industry requested; the devil, however, is in the details. Companies like BCC Software spend months—if not the majority of any given year—carefully monitoring (and guiding where appropriate) the impact of pricing granularity for certain mail preparations.
The pricing decisions of the USPS are based in part on their attributable costs for mail handling. Thus, direct mailers working closely with their software partners should actively seek ways to avoid costs to the Postal Service in the form of presorted work-sharing opportunities, which, in turn, result in postage discounts.
Due to our consistent monitoring of the impact of pricing on mail preparation, we are in a great position to help mailers ameliorate the effective annual pricing increases.
Postal challenges aside, direct mail has been benefiting from the growing ability to personalize and precisely target. Would you agree, and what other techniques or changes will drive the success of the sector this year?
CL: Direct mail is most effective when it delivers a personalized message. Thankfully, personalized data is far more accessible today for use by responsible direct marketers, who have the ability to leverage that data, enhancing the personalization of and call to action in a direct mailpiece. Companies like BCC Software have purposefully licensed more data than other software companies to help enable our customers to achieve a greater level of personalization and achieve increased response rates in direct mail.
Based on past trends, what are your expectations for the short-term future of direct mail?
CL: We are bullish about the future of direct mail. Digital fatigue is real—and continues. With recipients turning off and tuning out digital messaging at an increasing rate, what remains is trusted and tangible direct mail delivered by the most trusted postal delivery network in the world.