Understanding What Direct Mail Is
What is direct mail? It's unsolicited advertising sent through the mail to existing customers and prospects. Examples include postcards, solo mailers, catalogs, self-mailers, etc. Unlike mass media, direct mail is targeted so that you're reaching your most desired audience. It’s a rifle vs. a shotgun approach to marketing effectively.
In this post, I'll discuss the various aspects of direct mail and catalogs, including the differences between the two. I'll explain the advantages and disadvantages of both. I'll discuss when to use one over the other and the various formats to be considered. Think of direct mail as a big umbrella that encompasses several forms of “direct” media, including but not limited to catalogs, postcards, solo mailings, flyers, self-mailers, etc.
The catalog is the Grandfather of all direct mail. It yields the highest response rate and average order size. Catalogs come in different trim sizes, with 8” x 10 ½” being the most common. Some mailers prefer a nonstandard trim size in order to attract more attention in the mailbox. Page counts vary as well. Catalogs are bound on one side generally with staples, known as saddle stitched. They can be “perfect bound” if the catalog contains too many pages to saddle stitch, or if this look is preferred.
A “slim-jim” is also considered a catalog. It's less costly to mail because it travels through the postal system as a “Letter.” In order to be a slim-jim it cannot be more than 6” wide or 10 ½” tall. Staples are used to bind the catalog on the left side. Labels (i.e., tabs) seal the catalog on the top and bottom. Those tabs have to be broken in order to open and view the contents of the catalog. The advantage of a slim-jim is the postage rate, which is considerably less because it can take advantage of automation through the USPS and mail at a “letter” rate. The disadvantage is having to break the tabs in order to open the catalog. Response rates can be impacted up to 7 percent or more because many some consumers don't like breaking those tabs; however, postal and paper savings offset this. A slim-jim format is popular with business-to-business mailers as well as with consumer catalog companies.
I would be remiss if I didn’t talk about page count. Understand that there's a direct relationship between page count and the rate of response. The higher the page count, the greater the response. Our formula: Sales will increase by approximately one-half the percent increase in page count. For example, a 20 percent increase in pages will increase sales by approximately 10 percent, as a general rule of thumb. Adding pages means maintaining the proper page density. It doesn't mean that you should devote more space to the items being added. Nor does it mean that you should give more space to existing products simply as a way to fill more pages. For the economics to work, proper density must be maintained as page count is increased.
Another significant point about catalogs and page count is weight. A few years ago, the USPS increased the maximum weight limitation for piece rate catalogs from 3.3 ounces to 4.0 ounces. This was a significant event for catalogers. It meant that catalog companies could add more pages without increasing their postage costs. Keep in mind that postage expense typically represents 50 percent to 60 percent of the total cost of a catalog. Adding pages allows you to leverage postage costs. It's relatively inexpensive to add pages in eight-page increments up to a total catalog weight of 4.0 ounces. It’s a way to get more bang for your buck.
Postcards are another form of direct mail often used to drive web traffic. Obviously, there's a space limitation to mailing a postcard. That’s why it's important to communicate a clear call for action with a strong promotional offer. I believe that postcards can be effective when mailed to existing customers, but not so much to prospects. Postcards are strong retail store drivers when targeted to the correct geographic audience. Production lead times are relatively short for postcards compared with other forms of direct mail, particularly catalogs. A typical size for a postcard is 6” x 9”.
A solo mailing is often used for B-to-B mailers. Space isn't so much of a limitation unless compared with a catalog. A mailing package typically includes a cover letter along with a two- to four-page promotional piece mailed together in a #10 business envelope. It can be an effective form of direct mail that's targeted to customers and prospects alike.
Self-mailers or flyers are also an effective direct mail format. They're often a trifold one-piece mailer with one panel used for the mailing address and postal indicia. They work well for companies with a smaller SKU count, solo offering, or to advertise sale or clearance merchandise. Self-mailers are attention-getting and can also be used to generate retail store traffic.
In summary, customers acquired through a catalog generally have a higher response rate and average order. Their lifetime value is also higher. If yours is a startup business, consider some of the other less expensive format options when testing direct mail. Creating a catalog marketing program is expensive and takes time. The overall number of unique products or SKUs need to be considered before starting a catalog from scratch. Ultimately, I feel that all other forms of direct mail support companies that already circulate catalogs.
Originally published in Total Retail, https://www.mytotalretail.com/post/understanding-what-direct-mail-is/