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November 19, 2020

How Economic Pressure Accelerates Digital Transformation in Direct Mail and Beyond

The drive to harness the capabilities of digital technology is nothing new to businesses. Since the late 70’s, organizations of all sizes have gradually incorporated computers into every aspect of business, from product design, to finance, to sales and marketing. 

The concept of digital transformation is much more recent. In The History of Digital Transformation, the first cited mention of the term (as “Digital Business Transformation”) dates from 2005 — just after the founding of Facebook. By that point, Amazon was over a decade old, the Internet was going mobile, and businesses had been struggling to adapt to new methods of customer engagement, floods of digital information and an endless stream of new, disruptive technologies for years. 

To adapt to this reality, digital transformation proposed companies change how they incorporated technology. Instead of adopting software and hardware tools piecemeal, companies were now endeavoring to digitize everything they do, into a single interconnected system.

This change transformed marketing from a craft into a data driven science almost overnight. A flood of new tools and analytics made it possible for organizations to optimize their marketing efforts, target consumers and track ROI across social media, search engines, email and virtually anywhere else online. With omnichannel marketing, companies could now create a coherent strategy across all channels.

Well, almost all of them.

Direct mail was largely left out of this new omnichannel marketing approach. Because it wasn’t a digital channel, it was thought of as antiquated, expensive and disconnected from other channels. Direct mail was too valuable for companies to eliminate, but they also couldn’t harness it in a modern way, with the personalization, data tracking and optimization that powered their digital marketing efforts.

With the COVID-19 epidemic, however, organizations have realized that they can’t afford to neglect a valuable channel like direct mail anymore. Customer demand and the economic landscape are changing too rapidly, and businesses can’t keep up unless they can target customers with a truly omnichannel marketing approach. Here’s how COVID-19 and other economic pressures are driving businesses to complete their digital transformation.

Economic instability and Digital Transformation

Resistance to digital transformation is often treated by digital leaders as a flaw or liability. Businesses are supposed to continuously innovate, disrupting established patterns with new, more efficient and intelligent processes and products, and failure to do this is seen as a form of complacency.

But in reality, a degree of resistance to change is normal and even healthy for businesses. For enterprise digital transformation, companies are often dealing with such large, complex networks of software, resources and stakeholders that alteration of any element can lead to unforeseen disruptions of key business processes. In the case of digital transformation for small business, the immediate cost of revamping internal processes can be hard to justify, even when the transformation is likely to yield strong ROI.

Additionally, the endless stream of innovation hype makes business decision-makers rightfully skeptical of new upgrades, products and services. Unless the value of a digital transformation can be demonstrated clearly, the new innovation gets lost in the noise. 

Unfortunately, this natural and normal resistance to change can lead to extreme pressure to transform when economic instability strikes. A legacy inefficiency in how a company tracks with customer behavior or connects with leads may not be a priority when demand is predictable and plentiful. But when the economic instability changes customer behavior or reduces demand, what was a minor quirk becomes a major liability, requiring quick and radical transformation. 

This is the situation many enterprise businesses faced at the outbreak of COVID-19. Before the pandemic, most used legacy approaches to direct mail marketing. Creatives would individually design each creative brief and shuffle it around on paper for review by various stakeholders. It could take many hours to go through multiple revisions and get approval for a finished product — never mind verifying print quality, addressing and sending the mailing. 

Even before the pandemic, the process wasn’t ideal. It was costly, slow and inflexible, making it difficult to respond quickly to an event or crisis by mail. However, the complexity of enterprise marketing systems made it hard to justify digital transformation. Despite being inefficient and antiquated, legacy direct mail marketing remained very profitable, so modernizing it wasn’t a priority.

COVID-19 transformed the shortcomings of legacy direct mail into serious liabilities. There were new crises to respond to every day. People were forced to radically change how they worked, played and lived — literally overnight in some cases. In this new state of affairs, companies needed to be able to respond immediately to unpredictable economic changes on all channels, and their legacy direct mail approach needed to change immediately. 

This has led a series of companies like Verizon to partner with Lob, and update their direct mail marketing process to match the speed and efficiency of their digital channels.

The Need for Data Sharing

Data is often discussed in terms of innovation, but for most companies, the real value of data isn’t its innovative potential, but its day-to-day utility. Data can help you address customer concerns and pain points, identify your target audience, and make incremental tweaks to your products and services to better fit with customer needs.

The growing importance of data has changed the role of marketing, and how it relates to the rest of the company. Marketers depend on efficient collection and use of data to drive leads, upsell customers and so on, but the data they collect is just as important to the rest of the organization. When omnichannel marketing data is shared efficiently, it can help with everything from pricing to product development, to allocating research dollars. If data is fragmented or silo’d, however, the company loses out on crucial insights and becomes less competitive. 

Direct mail is arguably the most neglected area in marketing automation and transformation, and the place where data-focused digital transformation is most needed. In digital marketing channels, companies use sophisticated automation tools like Salesforce or Marketo to organize, produce and track their campaigns. These tools make it easy to segment contacts into categories for better targeting, run A/B tests on messaging, and track opens, click throughs and other types of engagement to see how well the messaging is working. 

But most businesses still use a much more primitive direct mail workflow, yielding far less shared data. Many companies have no way to track whether a flyer or postcard is even received, much less track ROI, or test different messaging strategies. 

Economic pressures, and the availability of sophisticated direct mail automation have begun driving companies to modernize their marketing tools. In the current economic climate, businesses cannot afford to have a blindspot in a major marketing channel like mail. They need to hone their messaging and analyze consumer preferences across all channels, not just as a way to increase marketing ROI, but as a crucial data point for the company as a whole.


How Direct Mail Digital Transformation Helps

From surviving the impact of COVID-19 to enabling true omnichannel marketing, direct mail transformation is helping companies do businesses more effectively and efficiently. 

Customer Acquisition and Lead Maturation

With an average ROI of 12:1, a modern direct mail marketing approach is an incredibly effective tool for gaining customers. LOB makes sending direct mail as easy as sending an email, greatly enhancing its effectiveness. You can automatically send personalized offerings based on customer actions — for example, sending a thank you postcard with a discount code when a customer places an order, or a follow up offer when a lead signs up for a webinar. You can also A/B test messaging, confirm delivery and track ROI, without ever having to stuff an envelope or print a postcard yourself. 

Payment and Invoicing

Paper checks and invoices are still a crucial part of doing business, but the cost and complexity of printing and mailing essential documents can slow down cash flow, and burn money. Lob enables you to automate both payment and invoicing, while saving money and time on printing costs. 

Customer Appreciation

A personalized “thank you” note can connect with a customer in a way a digital message just can’t, cementing customer loyalty and reducing churn. But legacy direct mail approaches are generally too slow, cumbersome and costly to make sending cards practical. 

Lob enables you to start showing your customers love at the mailbox, without bogging your team down. Our API enables you to trigger mailings based on whatever factors make sense for your customers. You can set it up to send annual birthday cards, reach out to customers who have gone inactive for 6 months, or send an automatic “thank you” the first time (or any time!) a customer does business with you. Your customer appreciation mailings will arrive right when you want them to, with a personalized message that shows your customers how much their business means to you.

Fighting Fraud

In the digital age, it’s easier than ever for scammers to create fake businesses to defraud consumers, but one thing they can’t fake is a physical address. With Lob, you can automatically send a postcard to the address of a new partner and client with a unique activation code. The recipient can then use that code to complete their registration or activate an account. 

This process has helped Major tech leaders like Facebook, Google Local, and Yelp ensure businesses are who they say they are, preventing frauds from registering with fake addresses. 

Get Ahead of the Economy With Lob

In this current economic moment, your company can’t afford to neglect a major channel like direct mail. Lob can help you drive new business, nurture existing customer relationships, and stay ahead of the next economic crisis. 

Contact us to learn how Lob can help your digital transformation. 

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