30 November 2015 Business

The evolution of direct mail

Email has become the new junk mail, while direct mail is better targeted, better designed and enjoying a growth in sales.

Direct mail is coming back. The most recent ad spend indicators point to a continuing fall in the value of newspaper and magazine advertising, but give a 4.5% rise to direct mail.

While this is relative, compared to the depressed direct mail budgets that have prevailed for recent years, printers across the sector are sniffing a change in the wind.

It is too soon to declare that this sector of print is out of the woods, but maybe there is some basis for a return to print and mail as a means of communicating a sales message.

It would be impossible to decide whether this is the result of the relentless marketing produced by the Royal Mail about the effectiveness of direct mail and its implementation of Mailmark as a system to add a layer of control over mailing campaigns, or whether it is fatigue with digital channels to the extent that email is now considered “the new junk mail”.

What seems equally clear is that print will no longer be the junk mail of the past where spray and pray methods to reach customers reached saturation point and tarnished the whole sector.

There will be instances of mailing campaigns with millions of items using at best rudimentary personalisation. But the new direct mail will be using better data, better production values and better materials. And the new direct mail will deliver measurable and predictable results.

There will also be closer links between the physical mail piece and a digital element to a campaign. In the simplest form this is a catalogue received through the post which encourages a customer to visit a website to make a purchase.

The catalogue becomes a more sophisticated entity: covers will be personalised to the customer, changing the highlighted hero products according to the profile of that customer and the offers needed to tempt him or her into a new purchase.

One high street retailer opted for this type of catalogue resulting in 33 combinations of catalogue. Boden is known for using personalised pleas to its best customers, though this can be equally effective when used on a lapsed customer list. It is akin to going fishing in the pond where the bigger fish are known to swim. There is a better chance of hooking a customer.

Malcolm Lane-Ley, executive chairman of Anton Group, says that Anton is getting lots of inquiries, possibly as a result of its social media marketing activity where a recent Faces of Anton initiative went viral.

“We have been getting lots of inquiries,” he says. But adds that demand with the return of direct mail has changed. It is no longer expected to be about volumes of blind door drop or white envelope pieces, but a more nuanced and targeted message, naturally affecting the volumes produced.

“The more you manage the data, the more you get the targeting right, the less you need to do. If you can mail 1,000 pieces rather than 2,000, yet get the same impact on sales, why produce more? This is more about targeting and refinement.

“And this ability to produce direct mail with a measurable ROI will bring people into using direct mail.”

Anton has engaged a telephone marketing company to create the appointments with marketing agencies in the centre of London, with the aim of demonstrating that its vast factory is just 30 minutes from Fenchurch Street station.

The future, he believes, is in winning over companies that have never previously used direct mail. Runs will be shorter, but with a greater use of digital printing, more careful selection of substrate and finishing effects.

“This low volume stuff is where the exciting creative work is and were direct mail is having an impact,” he adds. “These are people that have never done this type of marketing in the past.”

This would not be possible without the data management that identifies and profiles existing and potential customers for a brand. But this is not restricted to smaller businesses.

Tesco may have decided to part with the Dunnhumby business that created the Tesco Clubcard (a sale process that has been scrapped after only one bidder emerged), but rival Sainsbury’s is looking to exploit data silos to build a “single customer view” of its shoppers.

Chief executive Mike Coupe told analysts at the publication of interim results that this “will step us on again in the way that we personalise interactions with our customers”. Direct mail must surely be an outcome along with greater use of smartphones and inshore experiences.

A second trend in direct mail has been the development of hybrid mail. This is where what would have been sent from a post room in a council, for example, is instead sent digitally to a print and mailing house where the smaller jobs can be consolidated into a larger print run, reducing the cost of print and slashing the cost of postage.

Neopost released support for hybrid mail in the version of NeoPreference software that become available in the summer. The idea was to allow SMEs to convert the digital document, which may previously have been sent as an email, into a printed letter which is posted from NeoPost’s UK fulfilment centre.

Other smart mailing houses are able to consolidate different mailings and achieve volume discounts for customers through presorting the different campaigns for the Royal Mail.

It is possible to take this a step further and wrap different campaigns in the same envelop for a consumer using digital sorting technologies as part of the mailing and inserting line.

The CMC 250 is typical of a mid point line. It offers six feeders, can run VideoJet inkjet for addressing and can insert to window envelopes. Lake Image Systems provides the camera verification software that is needed. UK sales director John Bates says that there is a great demand for refurbished machines as for new, saying that the example that had been on its stand at the Print Show sold within the first two hours.

An MB folder can be included to take last sheets, fold and insert these using 2D barcodes or OCR to ensure that the correct letter is loaded to the right envelope and that each envelope has the correct number of inserts.

“The 250 is in all the big mailing houses,” he says. “It has become the workhorse for the industry because it is so robust and built so well.”

Others suppliers operate in a similar way. Kern will also provide refurbished machines to those that either cannot afford or do not need new. Its technology runs the gamut from the smaller standalone devices to high speed lines that will also wrap an envelope around the mailing from a reel of plain paper.

Stralfors did not opt for this functionality when installing a K3500 Silverline to cope with the additional volumes of print following installation of a continuous feed inkjet press last year. It does, however, include the K996 automatic cutter allowing the line to run at 24,000 envelopes an hour.

At the top end of the market are the machines from Pitney Bowes. At the lower end of the market are machines from AMS or KAS that can insert and address and include intelligence to selectively insert.

BCQBCQChris Knowles. “We have got to the point where we needed to set it up by itself.”

The operation occupies a 465m2 unit with its own small team. “We aim to handle short run bespoke mailings, from one to 50,000 units – that said though we have just done 125,000,” says Knowles.

“We are not into the spray and pray market. We want it to be tailored. A lot of print buyers are short of time and want a single-source supply. They want the reassurance of being able to deliver the job to us on a set day knowing it will go out on a certain day.

“We can call upon the litho and digital we have here, including the high speed black and white for letters and are able to do clever things with the Neopost including 2D barcodes and Mailmark codes.”

The full introduction of Mailmark, which will tell mailers when a campaign is being delivered to consumers in order to provide more accountability and to allow mailers to have their response systems in place.

It will add a further string to the direct mail argument that is already supported by statistics from Mailmen, the Royal Mail campaign to drive use of the post, from PrintPower and from others.

The greatest impact, however, will come from innovation, whether about sophisticated packaging and high value items that lead on to the purchase of even higher value goods, or the more prosaic.

Malcolm Lane-Ley reckons that the envelope itself is ripe for exploitation. “I’m getting very excited about the ability to put digital variable print on envelopes. A message that says ‘Malcolm, look at the great offer inside’ will improve open rates. I feel quite positive about direct mail really.”

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Royal Mail has been relentless about the effectiveness of direct mail and its implementation of Mailmark as a system to add a layer of control over mailing campaigns, or whether it is fatigue with digital channels to the extent that email is now considered “the new junk mail”.

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