Proof is in the parcel

“Happy New Year” has been replaced with “it’s nearly February” and we know what comes next so, blink and those best laid 2018 plans will come and go before we know it. This makes January much more than a month of detox and resolutions. With our professional hats on, it’s the time to look ahead, set the vision and do the bit we often overlook. Plan, in detail, exactly how we’ll achieve what we set out.

For the marketing industry, this often begins with what’s new this year. And for many, if not all, that’s GDPR. A regulation created to better control a world of relentless tech innovation, each one eking out yet more ways for us to communicate with one another, that has ultimately created unsustainable and frankly unacceptable grey areas for customer data and privacy.

If you’ve read my Creative Partner, Ben Hooper’s previous blog post on the renaissance of mail in 2018, he summarised our re-discovery of the many creative and strategic benefits that mail can offer today’s progressive marketer.

Nevertheless, as a modern creative business we must ensure our content delivers, or as David Ogilvy would have said “Sell, or else.”

Saying 2018 could be its year is the easy bit. Delivering ROI is what really matters. So, what is the ROI of mail?

I expected this to be a tough calculation. Partially because I was taught early in my career that mail is the most expensive medium in terms of cost per thousand. And it still is. I confess, I didn’t know how much a First Class stamp costs. (It’s 65 pence for up to 100g.)

Before I began researching this in more detail I expected that we would have to show mail’s value by combining actual tangible financial returns with intangible effects like brand perception and word of mouth, but I was wrong. The financial arguments are there. And that’s probably because of the avalanche of poor quality, poorly targeted digital content that we’re bombarded with every day. When someone uses mail, they tend to use it lovingly, sparingly, and wisely. The crafted direct mail message cuts through, and not just in a shouty, aggressive way either. Too often you can’t say that of retargeted digital ads, paid social posts, and e-mail newsletters.

Nevertheless, people are coy about the financial impact of direct mail. If you trawl through the DMA awards case histories you’ll be lucky to find much more than an uplift or improvement against target stated publicly. So, let me be a bit more specific.

In my time at Karmarama I recall reviewing one of our campaigns for our client Honda. The brief was to encourage “lost” customers to come back to an authorised dealer for their regular servicing. It was an integrated multi-channel campaign, including digital display, affiliates, PPC, radio, press . . . and direct mail. The agency’s analytics team undertook a thorough analysis of the results, focussing only on incremental revenue, which showed that mail delivered the lowest cost per sale. In fact, it was almost one fifth of the CPS of the next best performing channel (affiliates).

Last year’s Gold winner in the Best Use of Mail category at the DMAs did actually provide some more meaningful results. The campaign by creative agency Krow, was for another automotive brand, Fiat. Their charming direct mail campaign delivered a very impressive sales ROMI. But with a bit of industry knowledge you can work out that the profit ROI for the campaign would have been somewhere in the region of 5.4. Not bad for a campaign which they say cost under £19,000.

Back to my time at Karmarama, and a case study that Royal Mail themselves have also shared, for Costa. Then, the brief was to launch a brand-new coffee blend. Costa had been using the same coffee blend since they launched, whilst all around them both their big brand competitors and the cool independent artisan coffee shops were all offering a choice of beans and blends. We chose to use mail as one of the main channels because we wanted to prioritise existing customers. We were able to accurately track the impact of the mail, and I recall Costa almost sold out of the new blend, such was the impact of the campaign. But in financial terms the publicly stated incremental revenue was £387,685, with a ROMI of 2.3.

But as I’ve mentioned previously, focussing only on cold ROI doesn’t give you the full picture. We learned that when I was working for DFS. You won’t be surprised to hear that this powerful retailer is totally ROI focussed, and with that in mind we used mail as part of an integrated campaign to sell and to change brand perceptions, and we succeeded on both counts. The ROI of this beautifully-designed, editorial creative campaign was over 3 but it also made people think differently about DFS, changing positively 14 of the 29 brand measures that DFS surveyed.

What these examples have in common is that they help to illustrate the business case for a modern approach to mail is strong, and that mail makes financial sense when you’re able to target your message very accurately. It often also makes financial sense when it’s part of a wider multi-channel campaign. In fact, in the DFS case I mentioned, we generated most incremental revenue from consumers who received a carefully planned combination of direct mail and e-mail.

Combine this with the fact that mail comes out on top* of all the channels effected by GDPR and 2018 may well just be its year.

* In terms of processing people’s data, direct marketing has been confirmed in the regulations as being a ‘legitimate interest’, in other words it is one of the five bases for using data under GDPR. According to industry experts, if legitimate interest is your chosen basis for processing data, then direct mail seems to be the best channel for undertaking your direct marketing.