Digitally native brands have long thrived on using channels like social media and tools like retargeting to find new prospects. As that performance-driven strategy grew in popularity, more direct-to-consumer (DTC) brands copied what worked. With increased competition, CPMs across the most popular digital performance channels have grown by a minimum of 23% year-over-year on Instagram, all the way up to 185% for TikTok.
These rising costs have pushed DTC brands to step outside of digital and explore offline channels that can deliver performance and some degree of predictability. Direct mail in particular has emerged as the digitally native DTC’s first choice. This is fueled in large part by tech, data and results that mirror many of the capabilities they’ve become accustomed to. Today’s digital-to-direct mail solutions allow DTC brands to use web-based triggers to deliver programmatic direct mail campaigns. Spend on these campaigns topped $300 million in 2022, and will grow steadily for the next three years, according to the Winterberry Group.
Even though direct mail is a tried-and-true marketing tactic, it’s new ground for some marketers, especially those that sell all their products online. There are immense benefits for these advertisers to step into the offline world, and in the process drive customer engagement and purchases. Here’s why and how.
Why Direct Mail?
Direct mail is attractive because it performs. An ANA study found that letter-sized envelopes sent to prospect lists had the highest ROI of all media — better than social media. Direct mail delivers a similar experience to paid social advertising by creating a unique experience in an uncluttered ad environment. Even better, it gives consumers something tangible they can hold in their hands.
DTC brands may find direct mail attracts more loyal customers, because the consumers who respond are putting in the effort and are likely to repeat that process if they like a product.
Modern Direct Mail
Direct mail may carry an old school reputation, but it has evolved with the times, much the same way that digitally native brands have. More traditional, and expensive, customer acquisition approaches are still popular, dropping campaigns to a larger qualified audience.
Comparatively, DTC brands are finding great success in a 1:1 approach. Triggered or programmatic direct mail allows brands to deliver targeted mailers based on consumer action, much the same way they’d pursue an audience online.
These events can include visitors signing up for content, potential buyers abandoning a shopping cart, an upcoming birthday or expiring subscriptions. Sending a piece of mail at these critical points can help guide customers through the funnel, as well as manage costs by not mailing large audiences in one go. It also helps engage and build a relationship with existing and lapsed customers.
How to Get Started
Another reason for direct mail’s appeal is that it’s easy to test and refine without a huge upfront investment. There are three key items to think about on the first test: creative, audience building and tracking.
Direct mail offers lots of creative possibilities, starting with formats. Brands can send anything from simple postcards to beautiful catalogs that capture their brand story. Of course, the range of possibilities is tied to cost variability. Photoshoots, design, printing and postage are all related costs to this choice, so brands need to align creative, budget and campaign goals.
2. Audience building.
Like paid social, direct mail is a targeted ad medium. Campaigns perform best when delivered to a qualified audience. Of course, real-world actions can be different from digital behavior, and no brand should assume consistent audience outcomes across channels. There are consumers who spend lots of time online who may not check their mail frequently, or in a timely fashion. Some agencies have found that direct mail reaches audiences who aren’t active on social media and may be too busy for email.
Therefore, the direct mail audience needs to be modeled specifically for direct mail. Brands want to best predict how a consumer will respond specifically to direct mail. From there, they can test different creatives to make the most of the channel.
This is particularly important when investing in a larger acquisition campaign, but can be equally impactful in triggered workflows as well. Applying a score in the triggered workflow, based on consumer history of direct mail responsiveness, will help with results and additional cost savings. Why bother mailing the consumer who thinks of thoughtful communications as “junk mail”? It will just end up in the trash bin.
DTC brands love social because it lets them monitor performance. The same goes for direct mail. Modern direct mail has a variety of tracking options, from QR codes to personalized codes or URLs.
These vehicles drive the desired outcome, whether that is first-time purchase or a re-engagement. Large acquisition campaigns or triggered communications should have set KPIs that align with these outcomes. The models used to develop an audience need to be based around a brand’s specific KPIs so that the audience is built with performance in mind.
Marketers should set goals and establish baseline performance on direct mail efforts, watching how consumers respond and how quickly. Then they can explore opportunities to test creative, messaging, offers and audience to optimize future mailings. Consumer behavior is always shifting, so even as confidence in reaching the best customers is established, brands must continue to experiment and test.
Changing with the Times
Many brands are adjusting their marketing strategies based on the current economic uncertainty. While some may be making small adjustments to their audience strategy, prioritizing lifetime value over new customer acquisition, the truth remains that all brands are concerned with cost. With paid social CPMs growing at exponential rates, brands can’t afford to skip opportunities like direct mail, regardless of their audience strategy in 2023.
Kaitlin Dunn Troutman is VP of Marketing & Customer Experience at Alliant. She leads the Marketing and Sales Operations teams at Alliant, evolving solution positioning and delivery to provide maximum value to Alliant’s customers. Her career includes managing consumer acquisition for Martha Stewart Living Omnimedia magazines, later serving as Director of Marketing, Merchandising. A Marketing Club of NY Board Member and repeat Marketing EDGE mentor, Dunn Troutman is an advocate for marketing education and career development for new graduates. She graduated from Franklin and Marshall with a double major in Art History and Business Administration and has an AD in Culinary Arts from the Culinary Institute of America.