Your Best Direct Mail Audience May NOT Be Who You Think

Marketers often suppress email-engaged or repeat customers from direct mail campaigns, reasoning that if customers are opening your emails or actively purchasing, do they really need direct mail?

We thought the same thing. However, after several years of testing, we’ve found that engagement in one channel doesn’t necessarily diminish the value of another. In fact, some of the customers brands are most inclined to suppress from direct mail can be the ones who respond best to it.

That changes the question marketers should be asking. Rather than assuming email-engaged customers don’t need direct mail, brands should test whether coordinating the two channels actually drives more incremental demand. That doesn’t mean every email subscriber should receive a postcard. It means using controlled testing to understand when an additional touchpoint creates measurable value — and when it simply adds unnecessary cost.

A major direct-to-consumer and wholesale brand recently tested this and saw its email-engaged buyers drive the most incremental lift (i.e., iDemand). Its response rate for an email-engaged buyer who receives a retargeting postcard is 119 percent higher than an unengaged buyer who receives the same postcard. In contrast, the response rate for email-engaged prospects is 12 percent higher than for unengaged prospects.

Active customers receiving a retargeting postcard are also going to drive more iDemand than a lapsed customer. Active customers (last purchase within 12 months) are driving a 33x-56x incremental return (iROAS) in response to receiving a retargeting postcard vs. an 11x-22x iROAS for lapsed customers (last purchase was more than 12 months ago). The iROAS should be determined by withholding a random nth of each decile of modeled browsers mailed, with buyers and prospects always modeled and segmented separately.

Brands may see a different result in response to behavior-triggered vs. browser-triggered postcards. A postcard sent with no indication of recent intent may perform differently from one triggered by recent behavior, such as browsing a category, abandoning a shopping session, or engaging with a promotional email.

For example, for a major athleisure brand, its lapsed buyers are going to drive more iDemand than active buyers, depending on the type of trigger. Buyers about to lapse drive a 3.77–6.03 iROAS, whereas newly acquired buyers drive a 2.29–4.42 iROAS.

Triggered CRM direct mail has its place throughout the customer journey. Here are the top triggered CRM direct mail programs for driving incremental demand:

• "Welcome to the Brand" at 30 days to 60 days to drive their second purchase.
• "It’s Time to Replenish" based on how long the purchased product lasts.
• "Before You Go" to re-engage after they’ve opted out of email.
• "Happy Birthday" to drive brand loyalty.
• "We Miss You" to prevent them from lapsing.
• "Happy Brand Anniversary."

It’s critical to measure the combination of contacts, not just channels. When marketers evaluate email/SMS and direct mail separately, they can miss how the channels influence one another. Overlap analyses show which customers receive email, direct mail, triggered direct mail, or a combination of contacts and channels, and how those customers perform. For example, when a browser receives a retargeting postcard after receiving a catalog or core direct mail piece, their lift in $/piece is at least 50 percent.

Replace assumptions with evidence. Retail marketers have inherited many rules about which customers “need” direct mail and which can be reached digitally. Consumer behavior rarely fits neatly within those assumptions.

Marketers should test engagement and recency before the holiday rush. Retailers shouldn't wait until November or December to test a coordinated strategy. Holiday purchasing volume, promotional intensity, and consumer urgency will skew the results and make it difficult to distinguish incremental demand from transactions that would have occurred anyway.

Testing earlier provides a cleaner environment for evaluating audiences, creative, timing and offers. It also gives teams time to adjust their approach before the most competitive part of the retail calendar.

Results may vary by season, customer segment and product category, so no single test should be treated as a permanent answer. Retailers should repeat these experiments to determine whether the incremental benefit remains consistent.

The bottom line is always TEST, TEST, TEST.

Angie Bickel is senior vice president, Swift, Emerging Brands at Belardi Wong, a full-service marketing strategy agency.