Welcome back everyone. Earlier this week we recapped the previous year in direct mail, including a number of changes we saw within the industry. Today we want to look ahead and share four key trends we see having a big impact on the direct mail landscape in 2014 and likely beyond:
1. With rising postage costs, direct mail production partners will need to help their clients improve results and prove ROI.
If you missed Kurt Ruppel’s article from last Friday, he provided a great summary of the exigent rate increase that was recently approved and how advanced postal logistic strategies will be more important than ever in this new rate environment. The challenges at the USPS have not been resolved as Congress continues to “kick the can down the road.” Therefore direct mailers continue to have the added pressure of this postage increase and possibly changes in service levels from the USPS. To work productively in this environment, the only solution is to improve results. Better modeling, targeted offers and innovative creative will be required to just maintain current ROI, let alone to improve it. In addition, postal optimization and transparency to actual in-home delivery will have to be adopted by more clients. It is interesting to see the varying levels of postal sophistication that exists in the direct mail marketplace. Resolution of these USPS challenges will force that wide-range of sophistication and transparency to narrow considerably.
2. Attribution between direct mail, digital and brand marketing will become an even bigger topic than it is today.
What is the impact of the various marketing channels in the prospecting ecosystem? While this attribution is advanced in loyalty marketing, prospect marketing is very different. We all know there is an impact but just a few clients are beginning to accurately attribute the impact of these various channels. Once attribution is defined, we can begin to test the impact of integrating and coordinating these channels.
3. The arrival of digital color technology at a price point that can be leveraged for acquisition marketing is a game changer.
The intersection of a rising quality curve and the lowering price curve has crossed that critical point to allow it to be efficiently used for multi-million piece campaigns. We are helping our clients figure out how to best leverage this new capability of nearly infinite segmentation without a significant increase in production or postage costs. This capability combined with the ability of our clients to mine and leverage Big Data will cause segmentation to explode.
Our continued investment in resources and people for Marketing Sciences is very exciting. Our ability to improve our clients’ results is not new, as we have been beating control packages for years. The evolution of this ability to connect the science portion with creative and execution is a compelling offer. We have a better model for prospect marketing, and I am eager to share that story with our clients in 2014.
4. Direct marketers will continue to test channels and evolve strategies.
To date, direct marketing using digital channels has primarily been reserved for loyalty marketing. Clients have been investing in developing robust digital relationships with their existing customers. Adoption of digital support channels and electronic communications is growing rapidly. The integration of these channels is well underway with very good results. To support these customers we will continue to develop automated execution “engines” that support optimizing preferred communication channels seamlessly.
However, in the prospect marketing environment, these channels are used very differently. For decades direct marketers have been building an incredible amount of data resources based on a person’s name and address. However, in a digital environment these two critical pieces of information are not known. In addition, the ability to link email addresses to this information or even find enough good email addresses to be a meaningful channel for acquisition just do not exist. Prospect marketers will continue to define attribution and impact between these channels in 2014 and beyond.
2014 looks to be an exciting year for the direct mail industry. We are looking forward to helping our customers make their direct mail campaigns more effective than ever before. Cheers to a happy New Year and a prosperous 2014!
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