As mail centers position themselves for future business, which medium should they align themselves with: hardcopy or electronic communication? We've invited two industry leaders, one a CEO of an e-mail solutions company and the other a president of an industry association, to share their thoughts on the future of mail. What they advocate may surprise you!
In a time when approximately 250 million people are online and $145-billion worth of business is done through e-commerce, it seems as if the Internet is king. New communication and marketing methods, such as e-mail, are catching on and changing the way we work and live. With more than 200 million users worldwide, e-mail has become the hottest application on the Internet. Ninety-seven percent of Internet users correspond by e-mail, and there are up to 326 million e-mail boxes worldwide. With numbers like this, we have to wonder what the future holds for more traditional marketing methods such as direct mail.
According to a 1999 Direct Marketing Association study done by the WEFA Group, Internet spending is forecasted to grow at a rate of 45.7% annually over the next four years. On the contrary, the study predicted direct mail's growth to slow to 6.2%.
E-mail has several advantages over direct mail. E-mail is a timely and immediate communication tool. It can be customized to suit each of your customers, providing them with messages and news they want. Most importantly, e-mail is a cost-effective way to communicate with customers. How many CEOs can overlook an application that makes such a positive impact on their bottom lines? Will direct mail die a slow death, or will it continue as a tried-and-true marketing tool to be used in conjunction with newer, high-tech methods? Let's take a closer look.
Tried and True?
Direct mail has proven itself as a mature, strong and successful marketing tool. Though direct mailpieces are often criticized as bulky and time-consuming, these weaknesses may actually be camouflaged strengths. Direct mail allows marketers to tell their stories on a broader canvas. It is an effective method for marketers who must communicate their campaigns through both text and graphics. Of course, some e-mail campaigns are done through HTML, but currently, the majority of them are communicated only through text. Direct mail is still the most useful tool for marketers who have a complex story to tell, but not for long. Inexpensive e-mails complete with sound, video and text are currently available to marketers; however, very few end users have the bandwidth to receive these e-mails.
The staying power of direct mail is another benefit that has prolonged its status as a top marketing tool. Direct mailers usually tend to stay around longer; their senders hope long enough for recipients to notice, read and, most importantly, respond to them.
The Flip Side
While proving to be a strong marketing tool, direct mail also has several strikes against it. All too common are the unclear or dishonest mailers that fill our mailboxes. Though all direct mailpieces are not the same, this annoying "junk mail" gives its counterparts a bad rap. Of course e-mail has its own version of "junk mail" known to Internet users as "spam."
In addition, many direct mailpieces are boring on the outside and are sent to the trash can without ever being opened. This same problem faces e-mailers as well. If an offer doesn't sound interesting in the subject line, the e-mail can be deleted before it is opened.
As mentioned, e-commerce and Internet interest are booming. Consumers are now paying their bills, reading their favorite magazines, as well as communicating with friends and family online. Also, as environmental concerns grow, people are becoming more conscious of the benefits of e-mail over traditional mailing materials. More direct mailing means more trees that must be cut down with ensuing implications.
The volume of mail, including direct marketing pieces, is definitely decreasing. According to a study conducted by BAIGlobal, Inc., a worldwide business-to-business research company, mail volume for 1999's first three quarters totaled 2.4 billion compared to 2.6 billion in 1998. The study also disclosed that mail volume dropped from 817 million in the second quarter to 710 million in the third quarter.
The Next Generation of Marketing
According to the DMA, interactive direct marketing expenditures will grow from $600 million today to more than $5.3 billion by 2003. E-mail an instant, customizable and cost-effective medium is being used by more and more companies for many reasons.
Customization and Personalization: E-mail gives businesses the chance to reach an unprecedented number of customers on a one-to-one basis. Imagine being able to drill down to the exact needs of each of your customers, providing them with the news and information they want and will find useful. The result is a communications program driven by and tailored to the customers you are trying to serve and keep.
Customer Retention: So, your customized e-mail campaign has been sent. What's the next step? Take your campaign to the next level and track your customers' responses. Do they read your e-mails? Do they click-through and visit your company's Web site? Is the information you sent useful to them? Use this information to customize your campaigns even further. The result of increased customer attention and relationship management is something for which all companies aim a loyal customer base.
Technological Possibilities: Do you remember the first time you used the Internet or sent an e-mail? Since then, the technological advances in both arenas are immeasurable. E-mails, complete with sound, graphics, video and text will soon be commonplace, and marketers will be able to communicate their messages more effectively than ever before.
The Bottom Line
The significant cost advantages of e-mail over direct mail are hard to ignore. According to Jupiter Communications, the average cost of sending one e-mail message ranges from 1. to 25. the administrative costs of Internet access, the computer, etc. A single piece of bulk mail, including costs for administration, paper and postage, totals about $1 to $2 per piece. In addition, with e-mail, the customer or potential customer's response time is shortened considerably.
A Look into the Future
Both direct mail and e-mail are powerful marketing tools, each with its own distinct advantages. Though direct mail has proven to be a successful medium over time, it seems that marketers using only this method may be left behind. Don't discount direct mail's worth yet, however. Direct mail will remain an effective way to reach mass audiences, while e-mail will reach more highly targeted, specific audiences. This makes direct mail the perfect complement to reinforce Internet marketing tactics.
The benefits and advantages of e-mail are too good for any marketer to pass up. E-mail allows companies unparalleled access to a marketplace that is constantly evolving. With an extended e-mail campaign, a company can substantially improve its marketing results, reach a new level of customer retention and significantly improve its bottom line. We also must realize the importance of e-mail's timeliness. We now hold schedules that are busier than ever before and our communication channels must keep up with us wherever we are. E-mail is the only medium poised to move into the next generation of communications. It can be accessed from anywhere, sent from anywhere, and with the advent of wireless technologies, it has no boundaries.
Imagine one of your many customers contacts you and requests to have his bi-monthly statement sent via e-mail. He'd also like to pay his bill online each month and have access to his personal customer records on the Internet. In addition to this, he wants all promotional materials mailed to his home, except during the summer months when everything should be sent to his chateau in France. So now what do you do?
Communication is one of the most important considerations for businesses today. We're seeing a huge surge in communication technology advances such as e-commerce, e-mail, one-to-one communication, electronic bill presentment and payment (EBPP) and much more. We're also finding our constituents are keeping up with the new advances in technology and expecting us to deliver on them. At the forefront of this surge is document technology, which is paving new ways for many organizations to communicate. Broadly speaking, technology has become much more democratic virtually anyone can use a computer to view or produce documents. It's not just that today's PCs are more useable than yesterday's 3270 terminals, but end users have learned computers are an indispensable communication tool to support their work. Hence, companies are finding that their customers want to not only receive hardcopy mail, but also a mix of digital, online as well as electronic communications. Businesses are also finding they're able to reach more customers utilizing the various methods of distribution.
So, what should the mailing industry expect in the 21st century? With the increase in technology advances, businesses must be prepared to invest in the proper technologies for delivering information, keeping in mind the customer's preference for delivery options may be varied. The industry may also witness a new definition of "mail."
Mail, E-mail, Internet or ?
Many of the documents produced by today's companies are customer documents. Factors such as the Internet, on-demand printing, as well as increased emphasis on customer retention are changing the way organizations interact with customers. The changes encompass the very nature of the customer relationship, which is increasingly being handled on a computer-to-computer basis. Although there is emphasis on paying attention to customer preference, modifying a colossal organization's document systems and strategies to accommodate customer preference is a serious undertaking. One document professional at an insurance company said, "If we can't deliver in the format the person requests, we're in trouble."
Because of the various technologies that allow organizations to re-think how they deliver their messages, the future of printing and mailing has become a critical issue. According to Xplor International's recently published 1999 Technology Directions Survey, the user community feels these new ways of delivering information will affect the levels of their company mailings. For instance, 58% of Xplor user members surveyed said the long-term effects of e-commerce will decrease mailing demand. Sixty-four percent said the long-term effects of e-mail usage will also decrease mailing demand. However, 57% agree somewhat that the transfer of documents such as statements or invoices to e-mail or e-commerce provides more opportunity than threat, while 37% agree completely. What does this mean? It means that the days of a traditional print-and-mail-type of thinking is now being replaced by a document mentality. Hence, the mail your organization sends may be sent in almost any form.
Effects of New Technologies
Companies are now looking to an arsenal of solutions, not just traditional printing and mailing, to understand how they'll leverage the document in businesses and better interact with their various customers. They're especially looking to electronic document technology solutions. Thirty-nine percent of those recently surveyed said they have a program in place where electronic forms function without being printed. Sixteen percent said they have a pilot program in place, while 23% are currently investigating non-printed electronic forms. The survey suggests that new technologies will have an impact on traditional mailing.
E-commerce, the Internet and EBPP are definitely some of today's "hot" technology topics, and these methods are being used more and more as strategic business tactics to interact with customers and as mailing alternatives.
The Future Is C-mail
The new technologies that allow companies to re-think their mailing strategies are changing the definition of mail. Mail is no longer a message sent and dictated by its author. More and more, the recipient or the customer is dictating mail. Perhaps in the future, mail will be referred to as customer mail, or c-mail for short. C-mail is suggested as customer-defined communications driven by document technology, where the document is any package of data that is structured for use as information. C-mail could be traditional mail, e-mail, online viewing, EBPP or any other form of communication transaction. However, the key factor in c-mail is that it addresses the customer's needs using document technology. One example of c-mail is Canada Post's Electronic Post Office, where Canadians and businesses can receive their mail, conduct financial transactions including EBPP and access information. Through the program, businesses can subscribe to complete electronic mail delivery including bills, statements, advertising, catalogs and electronic forms. The Electronic Post Office is driven by customer choice. Recipients can specify the mail they wish to receive from the senders they have selected.
In the future, we'll watch as the audience really controls the generation and use of mail, as well as information, and the author is increasingly a resource for the audience. While all of today's organizations may not yet be offering a variety of communication delivery options to their customers instead of traditional hardcopy mail, things are certainly changing. The way we conduct business is changing.
Wrapping It Up
Hardcopy or electronic communication what may once have been an either/or choice is no longer. As mail centers position themselves for future business opportunities, they won't have to align themselves with one medium over another. Instead, as both Tom Detmer and Keith Davidson point out, to meet the needs and preferences of customers, mail centers managers must become experts in the delivery of both types of communication.