Friday, December 6, 2013

If Direct Mail Is Dying, It's Sure Taking Its Time About It

Source:  Forbes, Lois Geller

Taking Its Time About It
This is a record year for catalogs jamming my mailbox. It’s great.
It’s great that I get them, at least 100 so far this season, and it’s even greater that so many companies continue to produce them.
Why do they do it in this era of ecommerce?
 
Lots of reasons, but the short version is that direct mail, catalogs in particular, work. They’re profitable and they bring in revenue the companies can’t touch with electronic marketing alone.

The enduring power of direct mail is connected to two often overlooked societal phenomena:

1. The mail is often the only reliable way to reach reasonably affluent males.
2. The over-50 crowd, already large and growing, has a lot more money than younger folks and they’re just as happy to deal with you in print as they are in the cyber world.

Most catalogers still offer every possible response method: by mail, phone, fax, in person at a store. But, as often as not, most people who order from print catalogs do it online. The word synergy is overused but it fits here.

Our creative director, who gets a lot of print catalogs, orders by phone and calls around 10 at night.

Which companies are sending out catalogs these days? All the traditional ones you’d expect like Harry & David the fruit people, Hammacher Schlemmer, Smithsonian, National Geographic, Tiffany’s, Art Institute of Chicago, The Met, and so on.

And there are always newcomers, some of which are showing staying power, especially in the fields of clothing, jewelry, food, flowers, nesting merchandise and gadgets.
Catalogs have always struck me as direct-mail-written-large. They’re expensive to produce and mail so they have to be carefully targeted.
The catalogers adhere to the basic rules of direct mail, one of the most important of which is ALWAYS HAVE A UNIQUE OFFER and make it clear.
 
I saw several potential gifts in the Smithsonian print catalog but no offer, and yet when I went online to look around, I found Free Standard Shipping (a $7.95 value) and that’s always compelling.

Basically, everything in a marketing communication but especially in direct mail has to answer one question right away: What’s In It For Me? If the answer is clear, the prospect starts to get interested and look around.
 
It’s quite a different process from, say, a customer at a retail store like Best Buy who walks in with a specific purchase in mind.

The great catalogers test all the time: different covers, different offers, different lists, different prices, different product placement on page, and on and on. They test and track the results and use the information to get more profitable every time out. (See
The Ridiculously Inexpensive Magic of Direct Mail Letters for more about this.)
  • Price offers can include discounts, specific dollars off, Buy-One-Get-One and variations on that theme. A 15% discount might very well bring in more bottom line revenue than a 10% discount but you’ll never know until you test.
  • Flex-Pay. When QVC offers easy payment terms, they feature the monthly payment. Very popular.
  • Samples are a terrific way to get people trying your product. Cosmetic companies have been doing this for years. Get the first one free, then once you like it: you’ll buy it again.
  • Early Bird Offers often work for our hospitality clients. If you reserve during their quieter times, you get a discount on spa services, or complimentary breakfast. Airlines do this, too.
  • Deluxe version of whatever you usually sell. We’re offering one at Kickstarter.com for our dog book. Sometimes the deluxe version can also be a free upgrade gift.
Online marketing is a terrific force and it will grow, even as states and cities force marketers to charge sales tax.

But direct mail is not going away. I get a couple of thousand offers by mail every year. They arrive all year long, trending heavier in the last few months and in January and the number is growing. The industry is still selling billions of dollars’ worth of products and services. It’s not hip and happening, not “now” but it is highly effective and very profitable.
Sen. Baldwin says bulk mailing rate amendment will help printing firms

Source:  The Business Journal

U.S. Sen. Tammy Baldwin (D-Wis.) is championing an amendment to the postal reform bill that would curb large increases in postal rates for bulk mailers.

Baldwin visited Quad/Graphics in Sussex Wednesday morning and spoke with Milwaukee Business Journal reporters and editors Tuesday to talk about the impact of the amendment on Wisconsin’s economy. She outlined how the amendment would give postal customers “pricing predictability” and benefit forestry, paper and printing companies throughout the state like Quad/Graphics.

“Forty percent of the paper we produce ends up in the mail stream… any significant – beyond inflation increases in postage – affects our paper industry very dramatically,” Baldwin said.
Baldwin’s amendment strikes a section of the bill that would allow rates to be increased beyond the rate of inflation for bulk mailers.

“It’s pretty simple math for these folks that the postage is a significant part of their bottom line,” Baldwin said. “If it goes up, they are mailing less and nobody benefits. It’s a very important provision to get rid of.”

Joel Quadracci, president and CEO of Quad/Graphics, spoke about the issue during committee hearings on the topic earlier this year in which he told the committee: As discussed, above-inflation postage rate increases cannot be part of this solution (whether they are from straight rate increases or reductions in work-share discounts). The rate caps enacted as part of the Postal Accountability and Enhancement Act of 2006 (PAEA) have worked well to control postage rates and provide our clients with that much needed certainty.

Jeff Landin, president of Wisconsin Paper Council, supports the amendment.  “Now, unless changes are made to Section 301, an already difficult coated paper market is likely to see more damage due to further declines in mail volume,” Landin said. “Your efforts to provide predictable and moderate rate increases will not only benefit the paper industry in Wisconsin, it will help the USPS by providing more mail to deliver.”

More than 600 companies, retailers, nonprofits, newspapers and other organizations around the country support the amendment.
The bill is still in committee, Baldwin said.