We recently kicked off our 2023 webinar lineup with a deep dive into the data presented in the 2023 State of Direct Mail. We were excited to reveal our findings and highlight results based data insights including conversion, response, ROI, and many more.
The webinar was hosted by Lob’s own Senior Director of Content Marketing, Kim Courvoisier, and she was joined by Meaghan Hinchey, Senior Custom Research Analyst at Mintel/Comperemedia, and Paul Bobnak, Direct Mail Evangelist.
3 key takeaways from the 2023 State of Direct Mail webinar
Key takeaway #1: Direct mail delivers the best ROI, response, and conversion rates of any channel used
The 2023 report found that 74% of marketers agree that direct mail delivers the best ROI of any channel used – up from 67% in 2022.
“As someone in the direct mail industry, I have to say I am thrilled to see this statistic. Most of us that run direct mail programs know that it delivers (pun intended!), but this stat proves that it delivers on key performance metrics across the board, including response, conversions, and ROI,” said Courvoisier.
She posed the question of: What factors are influencing this increase?
Bobnak jumped in and shared that, “Consumers are increasingly tired of digital clutter, too much email or popups, and that another big factor is that more marketers are finding the sweet spot to use direct mail, such as in retention campaigns.”
“There’s a definite correlation between the use of technology and response rates,” said Hinchey when talking about the finding that 81% of marketers who use a software platform for direct mail agree it delivers the best response rate their company uses today. This shifts to 70% for respondents who do not use a software platform.
Courvoisier asked Bobnak, what do you think direct mail practitioners can do in 2023 to get attribution right?
“The easiest thing is to put people and methods that track performance. It could be a person, maybe even better with a team, that has responsibility for direct mail and can advocate for more automation that can track performance. And to use those findings to adjust and maximize their campaigns and ROI,” said Bobnak.
“The theme of the year is optimization,” said Courvoisier.
Marketers can put this insight into action by testing, experimenting, and optimizing direct mail campaigns to understand what works best with different cohorts to maximize return on investment.
Key takeaway #2: Bad address data, budgets, and response expectations challenge marketers
Taking a closer look at these challenges, the 2023 State of Direct Mail report found:
36% cite poor response rates
32% cite bad address data
26% cite budget constraints
Hinchey stated, “We see with the decline in technology usage an increase in these challenges year-over-year, particularly with bad address data. We also saw that the inability to verify addresses ranked in the top five list of our challenges overall. These challenges can certainly be mitigated through the use of software platforms to educate campaigns. They can increase visibility, improve tracking from technology partners, and can help to address some of the concerns with poor response rates.”
“Getting your data right should always be your first priority. Mail produces great ROI when it’s done well,” said Bobnak.
While marketers did cite budget constraints as a challenge, we also found that 58% of marketers have more marketing budget allocated to direct mail compared to 2022.
Hinchey added, “There are a few key reasons respondents indicated increases in their budgets allocated to direct mail. Marketers may have to spend more to maintain what previous campaigns results. We see increased competition for consumer attention. My interpretation of this finding all-in-all is that while nominal budgets are increasing, the real dollar value of spend may be staying stagnant.”
Bobnak added, ”The big one we have to worry about twice a year now: postage increases. That means you have to spend more just to stay even as Meaghan noted.”
Marketers can put this insight into action by making sure direct mail is integrated with other marketing touchpoints and can be triggered based on customer actions or behaviors to generate maximum impact from the channel.
Key takeaway #3: Marketers aspire to implement automation technology specifically for targeting, improved data tracking, and high-level personalization
40% of marketers use a technology platform to execute direct mail campaigns.
“We really know that software enables direct mail marketers to employ best case tools and resources,” said Hinchey.
Courvoisier asked Bobnak, “What do you think are the most important things companies will look for when vetting technology solutions?”
Bobnak said, “One is the ability for them to integrate their mail efforts with other digital channels and be a lot more omnichannel. That gives your brand credibility and expands your reach. Another consideration which is related is tech that improves your workflow whether you’re working with an outside vendor or doing everything in-house. This is especially true when you want it to get into the mail faster and sync up with your digital efforts.”
Marketers can put this insight into action by investing into automated direct mail software to ensure they can effectively target, personalize, track, and attribute their direct mail efforts and get better results.
2023 State of Direct Mail FAQs
We had some excellent questions asked during the webinar and wanted to recap some of them here.
Q: “Best ROI” means that it is in comparison to something. What was direct mail compared to? Paid media? …?
A: The report goes into this in more detail; we looked at direct mail compared to any other channels, including paid media and social media.
Q: Digital campaigns allow marketing teams to measure open, clicks, and conversions. How can you measure direct mail is opened and “touched” by the target audience compared to digital campaigns?
A: We use trackable methods like QR codes and pURLs to drive folks to a form to measure conversions and outcomes for direct mail. Direct mail KPIs are very similar to other digital channels. Let’s take a look at how we would measure direct mail vs. email: a click-through in email would be similar to a QR scan in direct mail. Or, a pageview from email would be similar to a pURL hit from direct mail.
Q: What do you mean by personalized URLs (pURLs)?
A: A personalized URL is a unique web address created for a specific target. They are an excellent way to measure effectiveness.
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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