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July 27, 2021

Transactional Email vs. Direct Mail: How Do You Decide?

Despite the decline in direct mail, nearly 40% of people say they still prefer receiving paper statements in the mail. This number was far higher for some industries, including medical bills and statements, which 74% of people prefer to get in the mail.

But there are still plenty of people who want electronic statements and communication. Luckily, you don’t need to choose one or the other. Instead, make bills, statements, and communication more accessible by letting your customers choose what kind of communication works best for them.

Don’t Treat Your Transactional Communication Like Your Marketing

Email and direct mail both have a variety of benefits when it comes to marketing. For many businesses, using both creates a holistic, omnichannel marketing experience. Other companies may have found purely digital or direct marketing campaigns to be more successful.

No matter what your marketing strategy looks like, though, don’t assume the same tactics will work for your transactional communication. For example, Gen Z and millennials respond well to digital marketing, but that doesn’t necessarily mean they prefer digital billing and communication as well. Remember, these digital natives were included in the Consumer Action survey, too.

The lesson? Don’t use your marketing results to optimize your transactional communication. Test your transactional communication separately. You may find the messaging that works well for your monthly coupons doesn’t work for your billing statements.

Know the Pros and Cons of Each

Transactional email vs. direct mail isn’t a black or white issue. Each has its benefits and drawbacks for both you and your customers.

Transactional Email

Transactional email is convenient for many and can save your company money, but it has some drawbacks that could hurt the customer experience.

Pros:

  • It’s fast. This makes it a great channel for ecommerce. With email, you can send confirmation emails, tracking information, and regular delivery updates that just wouldn’t make sense with direct mail.
  • It’s cheap. With email, there’s no paper, envelopes, or stamps to buy.
  • It’s environmentally friendly. Between rapid deforestation and climate change, it’s important for every company to keep an eye on their environmental impact. When you have hundreds (or thousands, or millions) of customers, your company’s paper usage could be a cause for concern unless you’re implementing sustainability practices to mitigate the issue.

Cons:

  • It gets lost. Automated emails can easily get marked as spam. It could also be easily overlooked in the 120 other emails people receive on a daily basis.
  • It’s not always accessible. Over 21 million people don’t have stable access to the internet—that’s New York, Los Angeles, Chicago, Houston, Phoenix, and Philadelphia combined. Communicating solely via digital channels such as email may leave many of your customers in the dark.
  • It’s risky. The risk of data loss is probably bigger than you think. Acronis’s Cyber Protection survey revealed that 43% of IT professionals reported their companies lost data or devices in 2020.
  • It has a low response rate. When people get over a hundred emails a day, it’s no wonder so many are hitting Select All + Delete. This results in a significantly lower response rate than direct mail.

Transactional Direct Mail

Transactional direct mail is more accessible overall but has drawbacks when it comes to timeliness and environmental friendliness.

Pros:

  • It can’t get deleted. People can delete emails en masse without ever reading the subject line. While people can easily throw physical mail away, that mail must still be looked at and handled before making its way to the trash can.
  • It’s more accessible. An address is required to open a bank account. That means if your customers are paying for your product or service out of their bank account, they have an address, which makes direct mail more accessible than email.
  • It can sync up with your digital behaviors. Direct mail was once done entirely by hand. Now, platforms like Lob can help you set up triggers so your direct mail syncs with your digital initiatives.
  • It’s good for paper filing. If no one used filing cabinets anymore, office supply stores would’ve stopped selling them. Plenty of people still rely on physical filing systems, especially for sensitive information like medical bills.
  • It has a high response rate. In fact, direct mail’s response rate is 8% higher than email! This results in fewer late payments, which benefit you and your customers.

Cons:

  • It’s less environmentally friendly. Luckily, there are direct mail companies out there making an effort to lessen the impact direct mail has on the environment. Some companies do this by offsetting their paper consumption by planting trees. Others use recycled paper. Some, like Lob, do both.
  • It takes more time. Direct mail may not be the best for sending quick communication, such as a tracking update. If your customers pay bills by mail, it may take longer for your customer to receive payment confirmation.

Give Your Customers the Choice

In the Consumer Action survey, 35% of respondents said they use both paper and paperless billing statements depending on the type of communication.

Why both? Here are a couple hypothetical examples:

  • Kate: she prefers to keep paper versions of medical documents and statements she can put in her filing cabinet, but she likes paperless billing for her internet provider.
  • Josh: he shares a phone plan and utilities with his partner, so he gets paper bills. That way, he can easily leave all the bills in the same place for his partner to see. For the things he pays for on his own, like medical bills, he prefers digital.

Giving your customers the choice allows them to store, file, and respond to statements and bills in whatever way works best for them, thereby reducing friction and improving user experience.

Want to encourage more of your customers to go digital? Great! Consider giving incentives like a small discount for “going green” with digital billing. It’s important, however, to keep the option for physical billing for the customers who want or need it.

Integrate Your Direct and Digital Communication

Giving your customers the choice does not mean creating two separate communications channels. To create a good user experience as well as ensure your own records (of payments, mailings, etc.) are consistently up to date, integrate your transactional email and direct mail. With software like Lob, you can set digital triggers, track mailings, verify addresses, and more to create a holistic omnichannel communications strategy.

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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