Alpha mail: print is retaking ground in the marketing mix
Monday, March 7, 2016
A few weeks ago PrintWeek reported on some survey findings with the headline ‘Public sees direct mail in fonder light’.
The piece clearly struck a chord; it has had a much longer lifespan than most news stories and is still being shared on social media to this day.
The survey, by data specialists Wilmington Millennium, found an increase in the number of consumers who thought that direct mail was a good way for businesses to connect with them. Almost half (48%) of the 2,000 consumers surveyed felt that way.
Wilmington Millennium said the improvement in perception it found was likely to be as a result of more responsible direct marketing practices “reducing the number of wrongly addressed mailings” alongside tighter targeting meaning that consumers were more likely to be sent offers that were relevant to them.
And when it comes to the buyers and specifiers of direct marketing, brands certainly seem to be in tune with this more positive print sentiment.
“It’s been quite an interesting 12-18 months in direct mail,” says Howard Hunt managing director Danny Clarke. “Our trading is 15% up in direct mail volumes, so that’s quite a substantial amount. That’s due to a combination of new wins and existing customers spending more.”
Clarke says that a couple of years ago Howard Hunt would have been factoring in a decline in volumes, which is hardly surprising considering the boom in marketing via digital channels such as email and web promotions. “Now we’re looking at growth.”
And he’s not alone, DST Output UK chief executive Jeremy Walters, who runs the UK’s biggest direct mail printing business, reports “a massive sea change” over the past 12 months.
“People are really positive around the results the media delivers,” he says. “Customers are seeing the benefits in their activity levels. It’s quite remarkable the difference 12 months makes.”
Walters points to a number of drivers behind the boost to activity levels, including new digital businesses that still need to use offline channels such as DM to grow their business. Some companies are also “seeing the power of the blend” says Walters, when it comes to combining missives via both e- and print channels.
Indeed, equipment supplier Pitney Bowes says that campaign ROI can increase by up to 45% by doing just that.
And there’s plenty of anecdotal evidence that some big brands that had previously switched to an e-only marketing strategy have returned to print.
Patrick Headley, chief executive at GI Solutions, says: “There are people who stopped mailing. Their policy was ‘no more paper-based communications’. But they are coming back at a rate of knots.”
Why? Because, to quote a recent survey by the Direct Marketing Association, ‘mail matters’ and it drives results. And the high-profile Mailmen campaign from Royal Mail Marketreach has also done a lot to push the effectiveness of ‘valued mail’ that drives response.
“We’re seeing more of an omni-channel approach. At the end of the day companies need to get their message across. Especially in mail order, the delivery of something to prompt a trigger, for example a targeted teaser rather than a big catalogue, is a fantastic way of blending the two channels,” says Headley.
And the stand-out afforded by a printed communication has become a key differentiator in a crowded world of multimedia messages. “The e-channel is so, so busy,” adds Headley. “I had a genuine moment the other day when I looked in my personal Hotmail junk folder and I was amazed at what was in there. There was some targeted stuff sent specifically to me. So as well as the situation where you’ve got people going through their own inboxes saying ‘junk, junk, junk’ you’ve also got email providers saying ‘you don’t need to see that’.”
This, believes Headley, is where the cut-through of a printed piece can really come into its own, and the blending of technologies and customer touch points is resulting in a different type of direct mail.
“We’re seeing a big rise in targeted programmatic mail. Perhaps someone has visited an e-commerce site but not completed their purchase. Instead of sending that customer an email we’ve found a niche in sending a mail piece to them afterwards,” he explains.
“So later that week, after a respectable length of time, something drops through their door. The response rates are ten-fold that of cold mailing.”
GI Solutions is using its hybrid mail channel to deliver this type of mail, which Headley says is being enthusiastically embraced by the firm’s clients. “If someone is looking at holidays and they’re looking at your site as well as other sites, it’s an opportunity to engage with them on another level. It’s amazing how mail works.”
There is, however, no getting away from the fact that mail volumes are declining. Research, such as the Outlook for UK Mail Volumes to 2023 report by PWC for Royal Mail, points to a gradual decline in the number of mailings of circa 4% per year. As well as the substitution of printed mail by channels such as email, one of the obvious reasons is better targeting means there will be far fewer (or perhaps no) huge-volume, scattergun mailings that kept direct mail printers’ presses turning in the past.
Now the focus is firmly on producing direct mail that is of more value.
However, innovations such as the aforementioned hybrid mail are also bringing in new volume that quite simply wouldn’t have been printed before. That’s certainly the case at CFH Docmail in Radstock. Managing director Dave Broadway describes the firm’s hybrid channel as being “the fastest-growing part of our business by far”, growing by 10%-20% a year.
The CFH offering allows SME firms, such as opticians, to easily tap into CFH’s print and mailing systems through an easy to use web-to-print system for producing letters, postcards and greetings cards.
“Postcards are particularly popular among SMEs because they’re low-cost, colourful and make a quick impact. Opticians, dentists and vets use them a lot for customer recall messages,” explains Broadway.
As Broadway points out, by making the hybrid DM route a straightforward and relatively inexpensive process it opens the door for SMEs to mail their clients more frequently.
“We make it easy for small businesses. Stuffing envelopes is mind-numbing and not a good use of people’s time if you’re mailing, say 2,000 letters. But if people can do that in five or 10 minutes via a website, it’s creating new mail that wouldn’t be there otherwise. That’s the feedback we get. They wouldn’t be doing it if it wasn’t as easy as we make it for them.”
In fact, CFH does a lot of marketing itself and can point to the success of DM in its own results. “We use DM ourselves and it delivers the single biggest ROI for gaining new customers, just above Google Adwords,” Broadway says.
CFH is just rolling out a new option for producing an A3 newsletter piece folded into a C5 envelope via the same system. Its recent expansion has seen it become one of the country’s biggest users of Xerox iGen print engines.
There have been a multitude of investments in the sector aimed at keeping the print offering fresh, and capitalising on the capabilities of digital printing technology. GI Solutions has recently announced a £1.5m spend on HP PageWide inkjet web printing technology that will be the first with HP’s High Definition Nozzle Architecture technology.
MBA Group in London has just placed a major order with Ricoh for inkjet presses, while both Anton Group and Eclipse have created hybrid inkjet/litho printing set-ups by adding high-speed Kodak inkjet heads to their existing litho presses. Howard Hunt has spent more than £2m on offline finishing equipment. And this is just a snapshot of recent spends, there’s a hint that further investment is on the cards at DST, as well.
The combination of print with digital marketing channels is driving print products in a number of different directions. For example, Clarke at Howard Hunt says that one of the main drivers for its recent investment was client demand for differentiation. “Clients have moved away from ‘cheaper, faster’ to wanting that ‘stand-out’,” he explains.
Simon Moore at Eclipse in Kettering concurs. “One of the things we’ve had good success with is innovations,” he says. “Some of our clients want stand-out products for improved response, so we’ve looked at options such as inline products in different sizes. The improved response cements our client relationship,” he notes.
Eclipse has also been trialling the new Royal Mail printable stamp option, where a ‘stamp’ is printed onto the envelope. “It can look really good, it looks like someone has gone to the effort of putting a stamp on it. It’s given a couple of our clients a significant increase in response rates,” Moore reports.
The flipside of fancy formats comes with compressed timescales. When printed mail is being used in conjunction with e-channels, there is pressure to turn jobs around more quickly than ever, in order for print pieces to be delivered in a similarly swift timeframe.
“To give the flexibility required for rapid turnaround customers are beginning to compromise on some of the pack formats they want to see, because the key thing for them is timing,” says DST’s Walters. “We’ve gone from 10-day lead times to just a couple of days – someone might ring up today and want to get a 250,000 mailing in the post for Tuesday.”
As such, DST has got faster at everything it does “and there’s no room for error”.
Despite the multimillion-pound technology spends and sharper service, there is one issue that looms over the direct mail market that is out of a printer’s control, and that’s the price of postage. “The biggest problem is the cost of delivery,” says Headley at GI Solutions. “It’s huge compared to email or SMS.”
And it doesn’t necessarily help when the left hand doesn’t seem to know what the right hand is doing, as one long-suffering print supplier points out: “Marketreach is promoting mail and being upbeat about it, while Royal Mail is putting prices up. I do sometimes wonder if the two sides talk to each other,” he despairs.
The PWC report into future mail volumes states, not surprisingly: “Future price increases significantly above RPI could reduce volumes considerably. In addition, continued price increases would be likely to increase the pace of e-substitution as it makes electronic communication relatively more cost-efficient.”
Separately, by this time next year Royal Mail wants to migrate 90% of the machine-readable mail it handles to its Mailmark system, which offers users the key benefit of tracking.
“Mailmark is great from a customer perspective, but not every manufacturer has embraced it as much as Royal Mail would like – there are additional costs to weather for suppliers, but it works very well,” Walters says.
“I would urge Royal Mail to think about the whole industry, their cost is such a massive part of what we do I would hate them to stifle that,” he adds.
More positively, the cost of postage is another factor in sharpening up the overall offering, most importantly through the use of accurate up-to-date data to ensure minimal amounts of waste.
“Mail is a premium channel and needs to be used as such,” says Headley, while Adare chief executive Robert Whiteside notes: “As long as businesses promote their products, services and brands there will be a direct marketing industry. The question is, what will that look like, how will it evolve and how much will be paper-based and how much will be digital?”
Printers are watching like hawks for the next trend. They’ve seen clients desert print for online marketing, yet they are now witnessing a fresh appreciation for the power of print – especially in combination with the very e-channels that threatened to destroy it.
MAIL MARKET RESEARCH
What makes a piece of mail valued?
Valued mail is defined as mail that:
λContains useful information
λMakes people consider or reconsider their perceptions about a brand or product
λCreates real feelings, whether personal or purely transactional
λDrives actions that create commercial value for the advertiser
92% of recipients of valued mail act on the mail they value
29% of people said that valued mail helped them to plan a future purchase
60% of people said valued mail can help keep the brand top of mind
44% of people feel better informed by mail they value
Source: Marketreach Mailmen research