Despite how "multi-channel" marketing has become a hot trend, direct mail and postage still account for a large share of a marketer's direct marketing budget. With new postal rates in effect and annual rate reviews as part of postal reform around the corner, direct mail planning and execution are ripe for cost savings. In direct mail, shape-based rates and automation are important. But any program must look beyond mail design alone to achieve meaningful costs savings. Mail needs to be "optimized" and that must take into account address quality, piece design, customer targeting and segmentation, logistics and tracking as well as production.
Many printers offer helpful tips on how to save printing costs, but few employ and apply full mail optimization expertise to achieve accurate and timely delivery of campaigns. Direct marketers can take projects to just about any printer to obtain an economical print buy. A smart marketer will want to take additional steps to ensure money is not left on the table.
What Is Mail Optimization?
Simply put, it's optimizing direct mail ROI through a multitude of disciplines customer targeting and segmentation; campaign and data management; creative and design; printing and production; postal minimization; and mail tracking and logistics. Not only does mail optimization translate to cost savings, it also increases reliability, improves delivery windows, shortens cycle times and leads to higher response rates because mail is designed, prepared and processed through the postal system in the most efficient way.
Seven Steps to Mail Optimization:
1. Targeting. A smart customer segmentation strategy can target mailings more precisely removing likely non-responders, migrating customers into higher value segments and supplementing mail with other communications for multi-channel customers in a way that effectively lifts overall response.
2. Design. The impact of mailpiece design and production is huge. Two retailers can do an eight-page bound catalog and pay completely different postage fees because one sought out design, automation and logistics optimization expertise and the other didn't. With the new focus by the Postal Service on shape-based rates and automation processing, meeting automation requirements becomes paramount in managing postage costs and delivery performance. Marketers need to work with mail designers who are "postal-savvy" or their Postal Service representative to ensure a direct mail design takes advantage of current postal automation and work-sharing discounts.
3. Data Services. Be sure to clean a mail file and look for ways to go beyond simple de-duping and National Change of Address (NCOA). Mail optimization takes a client's customer and/or prospect files and cleanses it correcting inaccurate address information, adding missing elements and removing undeliverable addresses as well as duplicates. Sometimes putting the mail file through proprietary software to enhance the data for better, cheaper, faster deliverability is also helpful. Mail optimization facilitates the data standardization and accuracy needed to enable ZIP-sorting for greater USPS sectional center facility densities, thereby improving both postal savings and in-home delivery windows.
4. Mail Processing. Whenever possible, process mail more closely to its final destination. The most cost-effective programs utilize vendors with multiple locations who can process mail at strategic entry points across the US.
5. Logistics. There are a myriad of ways to achieve drop-ship savings and, as a result, hundreds of potential transport routes. Be sure to work with a partner who can track mail through each phase of transport with the ability to troubleshoot on the spot if a problem arises. A good mail optimizer uses proprietary tools to optimize a mail plan to each client's specific needs and automate transportation functions such as routing, dispatch, tracking and post-delivery analysis. The key is to understand that a mail optimization partner can affect all facets of a direct mail program favorably. And the more sensitive the in-home dates, the more a marketer should think about mail logistics as shipping perishable goods that will "go bad" if delivered too early or too late.
6. Tracking. The work isn't over when mail is handed over to the Postal Service. Tracking mail within the USPS mail stream is an important aspect of mail optimization, and one that retailers (and other mailers) sometimes overlook. When done right, barcodes on mailing labels are scanned at each stop through the Postal Service from central Bulk Mail Centers (BMC) to smaller SCFs to the local post office (DDU, or destination delivery unit). For example, if a first scan in the Postal Service was on Tuesday, but the next was not until Friday, a mail optimization partner will bring that to the USPS's attention for troubleshooting before it is too late.
Look for a partner who uses proprietary software to track the mail's progress to a customer's home minute by minute. A good mail optimization partner also will give frequent, easy-to-understand reporting on that tracking. Mail tracking also can help "turbo-charge" a marketing campaign by enabling triggers for voice messaging and emails to heighten each customer's awareness of expected postal pieces, which serves to lift response and revenue.
7. Timing is key. No matter how beautiful and compelling a catalog, envelope or postcard, it can't work if it arrives after an in-store promotion period or event has ended. Be sure to stay focused on the in-home date throughout the creative and production process. Being true to that in-home date is critical to response, store traffic, web traffic, revenue and ROI.
Direct mail may not be the sexiest thing going today, but judging by its staying power and continued growth, it still works and will remain a key part of a marketer's multi-channel marketing strategy. The Postal Service says marketers sent more than 114 billion pieces of direct mail last year, up 15% from just five years ago. Whatever a marketer's mail budget, don't waste it on pieces that get lost or arrive late, and don't pay more than what is necessary to the USPS for delivery. A mail optimization partner can work to maximize and extend budget dollars despite rising postal rates.
Winnie Clark is Vice President, retail markets for Harte-Hanks, Inc., a worldwide, direct and targeted marketing company that provides direct and interactive marketing services and shopper advertising opportunities to a wide range of consumer and business-to-business marketers. Clark can be reached at 773-528-2721 or via email at winnie_clark@harte-hanks.com. Visit the Harte-Hanks website at www.harte-hanks.com.
