Direct mail is a profitable market with strong growth potential.
According to BFL&S' 2003 Top 100 Distributors' survey, direct mail sales rose to $141 million—a 6 percent increase from $135 million in 2002. Furthermore, the Top 10 sold $55 million in direct mail.
By most estimates, these figures dim in comparison to other market sales figures. For instance, the survey reported that in 2003, commercial printing grossed an impressive $488 million in sales, and promotional products' sales totaled $345 million. Nonetheless, industry experts agree that no matter how small, direct mail has a noticeable presence in the forms industry.
Roger Buck, national sales representative at Ward/Kraft, Fort Scott, Kan., admitted that his company is the "new kid on the block" when it comes to direct mail. Despite its rookie status, Buck pointed out that Ward/Kraft has seen a significant rise in direct mail sales in 2003. "We have seen an increase even though we are just moving into the market. However, we feel that segments of the direct mail market will grow and have great potential, particularly when the mailing piece can be married to other technologies, such as integrated magnets, plastic cards and four-color process pressure-seal forms," he explained.
David Yost, general manager for Roanoke, Virginia-based InfoSeal, said that consolidation played a big part in increased direct mail sales last year. "Consolidation is having a positive effect on the commercial and direct mail industries," he noted. "It appears that the opportunities for distributors have increased. End-users are looking for new and different direct mail package designs, and the forms industry has a lot to offer in this category."
When asked if the most recent postal increase affected direct mail sales, Buck said that because Ward/Kraft is fairly new to the market, it was not significantly affected by postal rate increases. "The rate change has had little effect on our direct mail sales, as we are just breaking ground in that area," Buck said. "The effect has also been minimal on our marketing because Ward/Kraft has been a leader in using technology to market its products. Tools such as fax, e-mail and the Internet allow us to be effective and cost efficient."
Yost said that InfoSeal experienced an increase in direct mail sales because of its ongoing commitment to customers. "Last year, our sales increased because of the kinds of products we offer and the market niche that we serve," he said. "Our base direct mail products have been an industry standard and have survived postal hikes."
When it comes to creating innovative solutions for clients' direct mail requests, manufacturers have developed a number of unique strategies. "For mailing solutions, the answer is a form/label, form/card or an integrated product combined with a mailing device, which may include pressure-seal, a cross web mailer or pocket form," Buck explained.
Yost said that pressure-sealed double postcards appear to have a strong following among his customers. "Customers seem to like the postcards because they are able to complete the mailing themselves—eliminating the expense of outside processing and speeding up the mailing process," he said. "We remain focused on providing value-added direct mail products, such as carbonized direct mailers, four-color process multi-ply mailers and pressure-seal cross-fold booklets."
What's Going On?
For the greater part of the last two decades, the use of e-mail has become a staple in national and international business. It would only be a matter of time before traditional printed direct mail would develop an electronic counterpart. Manufacturers shared their thoughts on the impact of e-mail on printed direct mail pieces.
Yost believes that e-mail will have no lasting impact on the traditional printed direct mail market. "Certainly, many have tried e-mail, but the results are inconsistent. I believe that direct marketers are becoming more selective in its use, yet it remains an important supplement to some direct mail programs," he noted. "However," Yost said, "postal mail is not intrusive—it is personal, and the recipient is able to review it at any time. Printed direct mail continues to be and will remain the standard for direct marketers."
A Work of Art
When it comes to service, manufacturers have taken the "there-is-no-'I'-in-team" approach. They agree that working closely with distributors has allowed them to serve their customers better.
"We have had some discussions with distributors on methods of co-op mailing and distribution of new product information. This may take several paths in 2004," said Buck.
He also said that customers are increasingly looking for "the convenience of having all parts of a direct mail campaign handled in one place vs. having to work with several partners on one job. Ward/Kraft has expanded the capabilities in its print and mail services area so that projects can be produced under one roof."
Yost welcomes the opportunity to work with distributors who enjoy new ideas. "InfoSeal depends on its distributors to facilitate new ideas. While we have some great distributors, we still find it a challenge to locate those who encourage product testing and fostering of new ideas."
Looking Ahead
Manufacturers say that in the new year and beyond, the future of the direct mail market looks bright.
"We fully expect direct mail to play a large part in our growth over the next few years," said Buck. "We have added equipment that allows us to provide short-run digital color with color personalization, short-run imaging and mailing, and plastic card affixing and imaging."
Like Buck, Yost agreed that direct mail has a permanent and promising niche in the business forms industry. "In our opinion, the industry can grow tremendously in the direct mail area. By offering new and alternative designs, distributors can ensure higher response rates for their clients' direct mail projects," he explained. "This is, after all, the primary goal of any direct mail campaign."
By Cynthia T. Graham