Email vs. Direct Mail

Marketers have often asked me whether it is better to use email or direct mail for a marketing campaign. From much research and many case studies, I have found that the answer is not an “either/or” choice. A sound integrated marketing strategy is like an orchestra, with all the different parts coming together at the right moment to create the patron experience. To develop a “Boston Pops” approach to your campaign, I recommend a model based score based on good data, a communications matrix to understand where your potential patrons are in the buying cycle, and personalized, relevant messaging to a potential buyer.

Good, clean data and modeling are necessary for strategic decision-making. Data does not lie. “Tried-and-true” gut decisions may mislead and misdirect strategic actions and funds. Through data-driven insight, a venue can achieve a deeper understanding of a customer’s actual value and propensities to purchase. This insight, in turn, drives the strategy and determines the campaign, delivery channels, tactics and offers.

With good data in hand, take the next step in a disciplined, precision marketing approach. Use a communications matrix to chart what channel, message, or offer should go to which segment of your potential patrons. A matrix can help avoid over-communicating and redundancy, which can be costly both from a financial and from a patron-relations standpoint. By mapping messages to specific segments, the tool can help you organize a prescriptive, customer-centric approach across all product lines of your company.
If you are part of a large venus, over-communicating may be a greater problem than you realize. At a bank in Asia, I found more than 1,080 requests for names out of their database were requested by ten different product departments within six months. One potential customer received 10 product offers in one day!

You can avoid such budget-wasting tactics. Set up a simple communications matrix in four quadrants with two key axes: current revenue and potential revenue. The quadrants identify responders in four categories: low propensity, future potential, high propensity and “best bets.”

Best Bets. This grouping refers to patrons who represent high existing revenue and high potential revenue, clearly the most attractive group –or best bets for your marketing dollars. Consider both email and direct mail for this population. Home Depot uses this successful strategy. When a family buys a new house, that homeowner becomes a best bet. Home Depot knows new owners will purchase fans, paint and wall coverings. Given this knowledge, Home Depot invests a larger percent of its marketing dollars in sending new owners slick, direct mailers with appropriate offers.
Low Propensity. This segment represents low existing revenue and low potential. Many times this segment represents patrons in which we have limited data or understanding. Consequently, it has the lowest chance of generating revenue for your company. Sending expensive direct mail would not be the best use of funds. Rather, this segment lends itself to electronic contact with lead-nurturing e-mails, surveys, or invitations to visit your booth at a tradeshow. At a minimum of 75 cents per unit, plus creative costs, direct mailers are too expensive an investment for patrons in this segment.

Future Potential. The population in this segment currently generates revenue for the company but does not have a high propensity to create significant new revenue in the future. Targeting the occasional user does not represent the best allocation of marketing budget dollars but staying engaged is key to continual nurturing and retaining this loyal customer.

High Propensity. This segment refers to prospects or patrons who represent low existing revenue but high potential revenue. The “high propensity” segment has greater potential than the other low and future potential, yet the strategy needs to consider a less costly communication engage and grow this segment. Emails with special offers could be effective with this segment. In keeping with the homebuyer example, a campaign may target renters that are considering a significant home purchase based on data and demographics.

A communications matrix helps you avoid a wasteful “spray-and-pray” or “one-size-fits-all” campaign loaded with generic messaging. Such messages are irrelevant regardless of how often they are repeated or by which means they are delivered. By understanding your audience segments, you can develop relevant, personalized messaging, which is ranked as one of the top strategies for realizing greater revenue and profitability from existing patrons. According to one study, business marketers spend an average of 30 percent of their marketing budgets on the creation and execution of content. “Content is now the engine that makes marketing go, ”said Joe Pulizzi, Junta42 founder and chief content officer.

All these factors play into any marketing strategy. In honing choices for your “marketing symphony,” keep in mind these recommendations:

  • Use good, clean data to develop a precisely targeted customer strategy.
  • Use a communications matrix to generate the highest return for marketing dollars spent.
  • Low Propensity, Future Potential, High Propensity and Best Bets describe the customer potential for revenue generation.
  • Use relevant, personalized messaging aligned to patrons in each segment of the matrix to gain the most benefit from your marketing dollars.