The US Postal Service literally guaranteed the effectiveness of integrating direct mail into marketing campaigns when it launched a postage-back assurance program in mid-May to attract the business of large marketers. The USPS is conducting the “Mail Works Guarantee” to convert large advertisers into direct mail marketers and to counter the large yearly drops it is seeing in First Class mail.
“Direct mail is the most effective and measurable way to get a message to consumers, and we know it won’t automatically go to a spam folder,” said Susan Plonkey, VP of sales at the USPS. “Of course, a direct mail piece is only as good as its offer and targeting.”
The USPS will use its experience to advise brands on how to effectively include mail in their marketing mix but will not assist with metrics or branding advice, she adds.
“We assume companies will already have very solid metrics in place to determine success. What we believe we can do is improve the performance of that campaign with direct mail. We also assume companies have determined the right brand message,” said Plonkey. “With our years of experience, and our vast amount of data on the effectiveness of direct mail and our knowledge of how to improve the read and response rate of direct mail, we believe we are uniquely positioned to help companies incorporate direct mail into their advertising mix.”
The USPS has declined to name the large brands that are participating in the program, but the program’s parameters say each must spend at least $25 million annually on advertising and mail between 500,000 and 1 million pieces of Standard or First Class mail yearly. The Postal Service will refund up to $250,000 in postage costs if their mail campaigns don’t meet agreed-upon expectations.
Industry experts say direct mail still adds a vital element to most campaigns, despite the fact that many brands have moved a significant amount of their spending to digital.
“In many cases, there’s only a 20% click rate with digital,” says Russell Kern, founder and president of The Kern Organization, a direct marketing agency. “What about the other 80%? Digital is faster and less expensive, but single-channel marketing isn’t effective for any brand. When you lose mail, you close a door.”
However, Jeff Hassemer, VP of product strategy for the data management services group at Experian, notes that the integration of marketing campaigns has hurt direct mail in recent years as brands have moved spending to other areas. For that reason, the initiative will likely not turn many major advertisers into direct mailers, he adds.
“They have not reduced volumes because direct mail on the whole was not working for them, they reduced mail volumes because they are achieving a greater return on investment from the combination of direct mail and additional marketing channels,” says Hassemer. “In the end, a company will maximize its marketing investment across all channels. Direct mail was king of this for quite some time, but marketers are now focused on maximizing budgets across all marketing channels based on return alone.”