Happy New Year everyone! As 2013 comes to a close, we thought it would be the perfect time to look at what happened within the direct mail industry in 2013 before ringing in 2014 on Friday with four key trends that will have the biggest impact next year and beyond.
First we should examine how the role of direct mail has changed in recent years. Despite new or evolving channels, I don’t think it has changed as much as some people might think. Direct mail remains the primary prospect channel for any industry that is efficient at measuring lifetime value of a client. For anyone in that group, prospecting is critical to the health of their business, and they continued to invest heavily in direct mail. Digital marketing channels continue to evolve and have an attractive ROI, but they are still a small fraction of the prospect pipeline our customers need to run their business.
That doesn’t mean there weren’t challenges. Our financial customers are operating under tremendous scrutiny as we emerge from the financial crisis. The heavy fines levied by the Consumer Financial Protection Bureau have all but eliminated affinity marketing to existing financial customers. Financial organizations have heightened sensitivity to security and risk, which has significantly impacted the controls and procedures we have in place at IWCO Direct to support their efforts. The level of control, accountability and security of every name passing through our facilities is amazing. While it was driven by the needs of our financial clients, all of our clients benefit from this robust workflow.
Postage costs continued to be a significant consideration. It’s generally about half of most of our clients’ direct marketing budgets and by far the biggest spend. With the exception of 2010, there has been some kind of postal rate hike every year since 2006, with another due to kick off in 2014. The pace of increases during this time far exceeds any other time in the history of direct mail marketing. Each year, we must help our clients mail smarter than before to maintain their overall budgets and still deliver the prospects needed to grow their business.
Despite a few challenges, 2013 was a strong year for the direct mail industry. Consumers continue to embrace it. It remains one of the most effective and measurable marketing channels in existence. And technology continues to evolve to make it more sophisticated and accountable. There are plenty of reasons to celebrate a successful year for the direct mail industry, and even more to look forward to in 2014. With that in mind, please check back Friday when we’ll share four key trends we see having the biggest impact on the direct mail industry in the coming year.
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