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September 30, 2021

How to Use Direct Mail for Customer Retention

According to the ANA/DMA 2018 Response Rate Report, 70% of Americans feel that receiving direct mail is more personal than digital mail. Whether it’s a promotional postcard or a small gift, direct mail is an excellent way to keep your brand top of mind and remind customers why they purchased from you in the first place. Down the road, these thoughtful campaigns may even encourage upsells and cross-sells that boost your company’s revenue.

But just like no one wants a cluttered email inbox, customers don’t want to receive pieces of direct mail that provide them little to no value. To retain current customers, you must curate your direct mail campaigns around recipients’ needs. Use your marketing data to craft relevant direct mail campaigns that keep customers coming back for more from your brand. This article will explain how to segment your customers and create different direct mail campaign strategies to prevent churn and increase customer lifetime value.

Segment your recipients

To kick off a direct mail retention campaign, think about who your customers are and look for the common denominators within those findings. By grouping audiences based on common wants and needs, you'll know how to adjust marketing campaigns for different segments and cohorts.

You can collect first-party customer data through surveys and online forms, your CRM, product analytics platform, or other in-house tools. Or purchase third-party customer data from aggregators who collect information from multiple publishers. These providers categorize the data based on certain characteristics, including demographics, psychographics, and behaviors. For example, different behavior patterns can reveal what stage customers are at in their lifecycle journey, giving marketers the opportunity to segment and provide value based on the needs of each lifecycle stage. 

First-party customer data is ideal because it’s often less expensive to collect than third-party information. More importantly, first-party data provides a more accurate picture of your customer base, so you can reliably curate your direct mail campaigns. For instance, you can analyze the click-through data of your social media campaigns to determine what copy and images are receiving the highest engagement within different segments.

Say your digital data reveals that clicks for more copy-heavy campaigns come from users between ages 50-65, whereas younger audiences in the 18-35 range interact more with image-focused campaigns. You might target older audiences with copy-focused designs and younger audiences with more imagery in your direct mail campaigns.

Choose your direct mail for customer retention campaigns

Now that you’ve identified the audience segments you want to target, it's time to create a strategic direct mail campaign to connect with your different customer groups.

Welcome kits

Send welcome kits to new customers that prove the value of your product right off the bat.

Avoid promoting your company heavily when sending a welcome kit. Instead, assume the first question a customer will ask is, "How is this product going to solve x problem of mine?" and provide an immediate answer to that question.

A successful welcome kit may include:

  • A personalized welcome letter.
  • A special "new member" coupon or offer.
  • A membership card (if applicable). 
  • A small gift or company swag.

Private jet airline Rise sends out a welcome kit to new members of the all-you-can-fly company.

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[Source]

The kit includes a custom-made box, informational inserts, membership cards, and luggage tags.

Company or product updates

Company or product updates are ideal for retaining regular users who are already invested in your brand, so they’ll likely care about your latest product news.

For soon-to-release products, send a piece of direct mail that includes the product image and its key features. Use messaging like "insider access" or "a sneak peek just for you" so audiences will feel like they are part of an exclusive club. You can also offer a special discount on the product, a pre-buy link, or even a code for early access to purchase.

Once the product is released, send a direct mail campaign with materials that show the value of your new offering. You might send a postcard with customer reviews or offer a custom discount on the new product.

For company announcements, you can use a service that imitates a hand-written letter personalized with the recipient's first name. Include photos of employees or an image related to the announcement, such as the architectural drawing of a future company building in a new city.

Birthday or anniversary cards and discounts

Show existing customers you’re thinking of them by celebrating their birthday, 1/2 birthday or anniversary with a direct mail campaign. This personal celebratory note seems to pay off. A case study by Hallmark Business Connections states that insurance companies who send birthday cards to their customers retain 16% more customers than those who don't.

The point of these cards is to make your customers feel special and not say, "buy my product!" Don't try to sell with CTAs like "Shop Now," Instead, use messaging like "a gift for you" accompanied by a custom offer redeemable online or in-store. Remember to personalize cards with customers' names.

By using an automated direct mail software like Lob, you can automate the distribution of this birthday mail every year.

Event announcements

Event announcements promote a feeling of exclusivity among customers that often increases loyalty and retention. Send a personalized invitation with wording like "You're invited!" to make recipients feel special. Be sure to also include what the recipient will get out of the event—whether it be access to special information, a "swag bag," or a discount on a product.

During the event itself, use a method for attendance tracking, so you can send a "Thank you for coming" note afterward. You may want to include photos, a recap of the event, or a calendar of future events in this follow-up direct mail.

When sending announcements for in-person events, always consider location in your segmentation strategy. You want to be sure the address of your event is close enough that it makes sense for your recipients to attend.

Milestone alerts

Thank customers for their loyalty with direct mail when they reach a significant milestone. This mail might be celebratory, such as congratulating a fitness bike user for completing a certain number of workouts. Or you might remind customers their membership is nearing its completion date and provide them an incentive for renewal.

Your goal is to make membership renewal as easy as possible. For example, include a custom QR code or URL in your direct mail campaign to drive them to a custom site with a one-click renewal button.

Test variations of your retention campaigns

Learn what parts of your direct mail campaigns are performing best with experimentation. By analyzing these findings, you can adjust your strategies to strengthen future campaigns and boost retention.

Depending on your company's goals, you can perform two types of tests: A/B or multivariate testing.

  • A/B direct mail testing refers to experimenting with a single change to direct mail for a customer retention campaign. In these tests, half of a group of recipients will receive the campaign as is without any adjustments, while the other half will receive the campaign with just one notable change.
  • Multivariate direct mail testing compares multiple variables of a campaign. A multivariate test might change both the CTA and an image in a piece of direct mail at the same time. These experiments can take a little more time than A/B testing, but you'll know which combinations result in the highest conversions.

Testing different campaigns means nothing if you have no way to measure it. Be sure to include a custom code—such as a URL, QR code, or discount code—on each version to measure conversions. To learn more about how to set up direct mail campaign tests, check out this resource.

Apply direct mail insights to digital campaigns

Direct mail is critical for retaining your customer base—but it isn’t the only tool at your disposal. Use a combination of direct mail and digital marketing to keep people coming back to your brand.

You might target a group of customers with teasers on social media about a new product or product update. Once the new item is available for purchase, send a postcard with a link or code that leads the recipient to the product’s page.

Digital marketing and direct mail work best when they're paired together in omnichannel campaigns. By using the best attributes of each medium, you have a unique opportunity to increase retention.

To learn more, get The Retention Marketer's Playbook.

This blog provides general information and discussion about direct mail marketing and related subjects. The content provided in this blog ("Content”), should not be construed as and is not intended to constitute financial, legal or tax advice. You should seek the advice of professionals prior to acting upon any information contained in the Content. All Content is provided strictly “as is” and we make no warranty or representation of any kind regarding the Content.

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