By
Lob
Marketing works best when your message reaches the people most likely to act. Direct mail makes that easier by delivering targeted messages straight to your audience.
In many cases, direct mail performs best when it’s sent to a defined group of people rather than everyone. Casting a wide net without knowing who is likely to respond can lead to wasted time and money.
Targeting changes that. Instead of sending mail to every address, targeting uses data to guide who gets your message. This article explains how targeting works in direct mail, how it impacts results, and why it’s so closely tied to return on investment (ROI).
Targeting improves direct mail ROI by helping you reach people who are more likely to respond. Instead of mailing to a broad audience, you can focus on individuals or groups who share certain characteristics.
Reduced waste: When you target your mailings, fewer pieces are sent to people unlikely to act, lowering your printing and postage costs.
Increased relevance: When someone receives a message that fits their needs or interests, they’re more likely to read it and take action.
Better efficiency: By reaching the right people with the right message, you can spend less and see stronger results, boosting your direct mail return on investment.
Data powers these targeting decisions, whether it’s age, location, past purchases, or online behavior. The goal is always the same: match your message to the recipient in a way that feels relevant.
Compare this to untargeted mail, where the same piece is sent to everyone. Without personalization, engagement is lower and more mail ends up discarded.
Audience segmentation divides your larger audience into smaller groups based on shared characteristics. This allows you to send different messages to different groups based on what will connect with them.
Three main types of data help you create these segments:
First-party data comes directly from your business’s interactions with customers. This includes:
Because it comes from your own customers, this data is specific and reliable for targeting.
Second-party data is another company’s first-party data that they’ve agreed to share with you. For example, a travel company might share customer data with a hotel chain through a partnership.
These arrangements help you reach new audiences who are likely to be interested in your products or services based on their relationship with your partner.
Third-party data comes from organizations that collect information from many sources. It helps you reach people outside your current customer base who share traits with your best customers. Examples include:
While third-party data can expand your reach, it’s important to verify its accuracy before using it for targeting.
Personalization goes far beyond just adding someone’s name to a mailpiece. Research shows that personalized direct mail can increase response rates by up to 44%, making it a powerful tool for improving ROI.
Here are three effective personalization strategies:
Dynamic copy changes based on what you know about each recipient. This might include:
For example, if someone browsed pet food on your site but didn’t purchase it, your mail might include a discount code specifically for pet products.
Visual elements can change based on recipient data, creating a more engaging experience:
These visual cues help recipients connect with your message on a deeper level, increasing the likelihood they’ll respond.
Trigger-based mailings are sent automatically when someone takes a specific action:
These timely, relevant messages often generate the highest response rates because they arrive when the recipient is already thinking about your business.
When you send mail matters just as much as who you target. The right timing can significantly boost your ROI.
Finding the right frequency helps maintain interest without overwhelming recipients:
Some audiences respond well to monthly communications, while others may prefer quarterly updates. Testing different cadences helps you find the sweet spot.
Strategic timing based on seasons or customer lifecycle stages can improve response:
By aligning your mailings with times when recipients are most likely to be receptive, you can improve your ROI.
Clean data is essential for targeting success. The USPS Coding Accuracy Support System (CASS) helps ensure your mail reaches the right recipients:
Regular list cleaning prevents wasted spending and improves campaign performance.
Understanding how to measure your results is key to optimizing your strategy. Here’s how to calculate ROI:
Start by adding up everything you spent:
Don’t forget less obvious costs like software subscriptions or analysis time.
Track which sales or conversions came from your mailings:
These methods help you connect specific actions back to your mailings.
Once you have your costs and revenue, use this formula:
ROI = (Revenue - Cost) ÷ Cost
For example, if you spent $10,000 and generated $15,000 in sales:
(15,000 - 10,000) ÷ 10,000 = 0.5 or 50% ROI
That means for every dollar you invested, you earned $1.50 back.
Modern tools make it easier than ever to track performance in real time.
These tools bridge the gap between physical mail and online tracking:
For example, a QR code might lead to a landing page where the recipient claims their offer, letting you track both the scan and the conversion.
The Intelligent Mail barcode (IMb) system gives visibility into delivery:
This information helps you time follow-up communications and understand delivery patterns.
Connecting your mail data with other business systems creates a complete view:
At Lob, we’ve found these integrations help marketers make better decisions by showing how direct mail fits into the bigger picture.
Combining direct mail with digital marketing creates a powerful omnichannel approach that increases ROI.
Coordinated messaging across channels reinforces your message:
This multi-touch approach keeps your message top-of-mind and gives recipients multiple ways to respond.
Use direct mail to complement digital ads:
This strategy helps you reach the same audience through multiple touchpoints.
Mobile messaging provides timely follow-up:
The immediacy of mobile communications pairs well with the tangible nature of direct mail.
Smart targeting not only improves response rates but also helps control costs, further improving ROI.
Choose the right format and postage for your goals:
Match the format to the campaign’s value to optimize spending.
Automation streamlines the process:
These efficiencies reduce labor costs and minimize errors.
Strategic printing arrangements reduce costs:
Lob’s Print Delivery Network uses this approach to optimize cost and delivery speed.
Benchmarks help you set realistic expectations and goals.
Mailings to existing customers typically perform best:
Acquisition campaigns to new prospects look different:
Performance varies by industry:
Comparing your results to benchmarks helps you see if your targeting strategy is working effectively.
Targeted direct mail requires the right technology to execute effectively at scale. At Lob, we’ve built a platform that makes it easy to put these strategies into action.
Our platform connects with your existing systems, letting you use your customer data to create highly targeted, personalized mail campaigns. You can set up automated triggers based on behavior, integrate with your CRM, and track results in real time.
The Lob Print Delivery Network ensures consistent quality and timely delivery, while our tracking tools give you visibility into performance.
Ready to revolutionize your direct mail ROI with targeted strategies? Visit https://www.lob.com/sales to book a demo and see how Lob can help you put targeting into action.
What data privacy rules apply to targeted direct mail campaigns?
In the US, direct mail targeting is primarily governed by CCPA in California and similar state laws that give consumers rights regarding how their personal data is collected and used. Unlike email marketing, physical mail doesn’t require explicit opt-in, but keeping lists clean and honoring opt-out requests is both best practice and smart marketing.
How long should you wait to measure direct mail ROI accurately?
Most direct mail campaigns should be measured over a 30-day window after delivery to capture the full response cycle, though this varies by industry and offer. Some recipients respond within days, while others may take weeks, especially for higher-consideration purchases.
What percentage of your direct mail budget should go toward postage versus creative production?
For most campaigns, allocate about 40–50% of your budget to postage, 30–35% to printing and production, 10–15% to design and creative development, and the remainder to data and analytics. This balance shifts based on your format, personalization level, and mailing volume, with higher personalization requiring more investment in data and production.
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