The Perfect Couple?
Getting into a prospect’s home with your direct mail piece is akin to crashing his or her party. If it’s an event you want to attend (of course it is!)—and where you’ll increase your chances of starting or improving that relationship—then you’re going to have to do better than arriving in the same old mail piece, no matter how well-dressed.
These days, the better approach is arriving as a couple, with e-mail as direct mail’s date. Since it’s difficult to get a moment alone with a prospect today, especially during his or her private time, it’s better to approach that prospect as an integrated pairing rather than two separate, unrelated, wannabe guests. The chances of eventually getting a response are also considerably heightened when both channels are deployed. Additionally, it’s often hard to predict what type of communication a prospect prefers, so both methods should be made available.
Before tiring of this metaphor, consider the only way this dual approach works is if the mediums are present as a united front. The days of going solo—or often worse—as the bickering couple are over. So while it wasn’t love at first sight, with direct mailers and online marketers vying over budgets and sales credit, and perhaps viewing each other with some degree of skepticism, their similarities and differences alike actually make them stronger as a duo.
The Challenges
Times have never been harder for direct mailers to get into prospects’ homes, with the cost of entry at an all-time high. “There’s some very clear trends that are happening in the industry right now. As a result of the postal costs, the paper costs, a weak economy and response rates being down, the financials for the direct mail channel are kind of drying up,” claimed Michael Bloom, general manager of Datran Direct and VP of direct marketing operations for Datran Media in New York City. “You can’t mail deeply, and, at some point, you just lose enough critical mass and reach a tipping point where you don’t have enough volume to support the infrastructure needed to conduct the business,” continued Bloom, who ominously predicted that we’re about to see some key players and categories going upside down.
The direct mail databases, for instance, are in trouble. Having managed a direct mail database for 15 years, Bloom has noticed the inactive universe is going out of control. “You’re having great difficulty mailing to reach your expires, and that’s [the] bread and butter ... the most critical segment for any database marketer,” he asserted. Bloom explained if you can’t mail deeply enough to them, the active pool is only going to shrink that much faster, with some names dropping out because of age or a sheer inability to get through.
Bloom is witnessing this across verticals, as clients are reducing their volumes in direct mail, reducing their direct mail tests in direct mail and flat-out shifting budgets from direct mail to online.
Much of this has occurred because many companies remain stuck with silo setups, with one group that runs the direct mail campaigns and another separate group that operates the e-mail campaigns.
“It’s very rare those efforts are run by the same department. So acquisition is typically split by channel, and there’s a reason for that. The people [who] are running direct mail have been there for a very long time, but now you have this online acquisition engine that’s being run by a new generation, so you definitely have that cultural difference,” explained Bloom, who said the problem intensifies with each group using different metrics while both are looking for acquisitions to be credited to their groups.
As a result, the groups are not integrating and sharing valuable resources. Instead, there are competing messages and competing offers going to consumers via e-mail or direct mail. “Meanwhile, each group is somewhat reluctant to drive traffic to the other group,” Bloom pointed out.
Mal Warwick—founder and chairman of Mal Warwick Associates, a Berkeley, Calif.- and Washington, D.C.–based fundraising agency specializing in direct marketing—noted fundraising mailers facing similar hurdles. “The cost effectiveness of direct mail donor acquisition is increasing, so cost effectiveness from the perspective of our clients is decreasing. And in bad economic times like this, they tend to cut down on their prospecting. Meanwhile, acquisition online is doing quite well,” he shared.
As a result, it’s becoming clearer by the second that direct mailers have to integrate with online marketers for their survival, and presently there are a lot of marketers who are scrambling to get up to speed.
Getting Them on the Same Page
Making a decision to no longer dwell in the direct mail silo and embrace online marketing is the first step (just as online marketers should take a good look at adding direct mail to their arsenal). “But it takes skills to migrate people from direct mail to online and vice versa. The online people don’t have direct mail skills or the resources to put the programs together. And the direct mail people don’t have the skills or the resources to implement [online programs],” described Warwick.
That explains the reasoning behind his company’s very recent decision to purchase the full-service online fundraising, advocacy and advertising company Donordigital. “We were trying to build an online capability in-house, and we have a few people who are engaged in this. But it’s not enough to meet the growing demands we’re facing from clients,” illustrated Warwick, who said he had three options: grow gradually within, hire a superstar and build it into a significant business or an acquisition.
“It didn’t take very long to realize that the first two options weren’t very practical,” said Warwick. He recounted the advice from one of his firm’s board members, Sheeraz Haji, founding CEO of GetActive Software and later president of Convio—both successful eCRM software companies. “He said simply, ‘Go big, go fast.’ So it became relatively easy to settle on Donordigital,” remarked Warwick, who explained that this was actually a requisition, as Donordigital began as an internet services group for MWA and spun off in 1999.
“Multichannel donors have the highest lifetime value of all donor types—and with comprehensive online and direct mail services under one roof, we can finally enable clients to develop real, integrated fundraising, not just pay lip service to it,” described Nick Allen, founder and CEO of Donordigital.
There’s no demise of direct mail, concurred Warwick. “Instead, there’s increased interest in integrated marketing. After all, there’s a considerable amount of evidence that people [who] give on more than one channel are much better donors,” he stated.
This silo mentality, in fact, is defeating the beauty of multichannel marketing, declared Bloom. “Instead, direct marketers now have the opportunity to reach consumers via multiple channels with consistent messaging and present a comprehensive suite of offers that enable consumer[s] to transact in whatever channel they like with the exact same opportunities across channels. You’re really offering better convenience and more choice[s] if you have those kind of integrated messages,” explained Bloom.
So what is the best integrated approach Bloom has seen? He described having a leading e-mail campaign, roughly one week in advance of in-home for direct mail; next, you have the direct mail piece; then a week after the in-home of that direct mail piece, you have a post e-mail campaign.
“The leading e-mail campaign notifies the consumer [he or she is] about to receive a direct mail piece, so it creates tremendous awareness. In addition, it notifies the consumer of the offer, so the consumer can transact via e-mail or can get excited and wait for the direct mail piece to arrive,” illustrated Bloom, who said the direct mail piece will enable consumers to transact via the direct mail solicitation or will also drive the consumer to a website. It may even reference the fact that an e-mail was sent to the consumer that he or she can go back and take a look at, and it will notify him or her that another e-mail will be sent in about a week.
“Now you’re using the channels to their maximum effectiveness. It’s just great form. You’re making your company look like a well-oiled machine and really putting your best foot forward and offering consumers a tremendous convenience,” said Bloom.
This article, part one of a two-part series, originally appeared in the September 2008 issue of Inside Direct Mail, a sister publication of Print Professional.
For more information, visit www.insidedirectmail.com.
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