This article originally appeared in the November/December, 2017 issue of
Mailing Systems Technology.
There are numerous walls that have been built up between the mailing industry and other businesses, and we need to work harder to break them down. These walls are having a negative impact on the collective mailing industry, including the Postal Service, acting as barriers to businesses that could be using mail for advertising or communicating. Rather than scaling these walls, businesses often choose other alternatives. And the result, if we are not careful, is a decline in mail volume that will eventually upset the delicate financial balance that is the underpinning of our postal system.
Mail volume trends are of paramount importance — not just to the USPS, which depends on large volumes to bring economies of scale and sufficient postage revenue to offset its costs — but also to the entire mailing industry because mail is our lifeblood. Without mail, few reading this article would be in business.
This year, the USPS has reported declines in mail volume in nearly all categories except parcels. And while there are a lot of factors behind the trends — and the decline is not necessarily cause for alarm — it is also not something our collective industry should ignore, especially because there are many things we can do to grow mail volume. One of the biggest things we should be working on is breaking down those walls that keep businesses from using the mail.
Barriers Identified by Marketers
The Postal Service’s Office of Inspector General (OIG) recently issued an advisory report called “Assessing Marketers’ Barriers to Direct Mail,” which focuses on some of the issues identified by marketers and advertisers on using direct mail. This is not new information in that there have been previous studies and research around barriers to using direct mail, but the OIG report is credible, recent research that lays out some of the top barriers identified by primary decision makers for where ad dollars are spent.
The top barriers identified by focus groups and surveys in the OIG study included the “perceptions of the lengthy and inflexible process involved in preparing mail, lack of awareness about the effectiveness of mail, and inability to access information about the value of mail, including case studies.” Marketers in the survey and focus groups also identified “difficulties in implementing direct mail campaigns.” Some of the difficulties reported included high costs, delivery speed, date, and performance, lack of easy-to-use design tools, challenges to complying with mailing specifications, difficulty understanding mailing rates and promotional offers, and difficulty working with the Postal Service.
So what can the mailing industry do to promote the use of direct mail and help grow the industry? There’s plenty!
Promoting Direct Mail
Everyone in the mailing industry — including the USPS — should be working to promote direct mail. If any part of your business uses or relies on others using direct mail, then you can be part of the solution — or part of the problem.
Each time a business customer uses the mail, each time they call on one of the many providers in the mailing supply chain to provide services, and each time they interact with the USPS or any of our businesses, we have the opportunity to make that experience a positive one — or a negative one. “Customer-centric” is not just the latest buzz word; it is a reflection of how we all want to be treated by the companies we choose to do business with.
The journey starts with all of us working to promote the use of mail, then making every step of that journey as customer-centric as it can be. I’ve been in this industry for over 25 years and I see a lot of positive movement in the promotion of mail in the last few years. Here are just a few examples:
The Integrated Media Research Center (IMRC) is a collaborative effort between the USPS, its OIG, industry, and academia designed to share and promote research, case studies, and best practices to help marketers and businesses understand direct mail (and other marketing media). If you have not checked out the IMRC website lately (www.imresearchcenter.com), do so. If you are a service provider in the mailing industry, there is a wealth of information available on the site to help you educate and entice customers to use direct mail. And if you have successful case studies about customers who have had great results from direct mail, the IMRC would be a great place to showcase that information (and promote both your customer and your services).
The USPS also has a website to help support the use of mail (www.uspsdelivers.com), where it has research, information, and case studies focused on both shipping services and marketing by mail. And the USPS’s “Irresistible Mail” campaign and awards (https://irresistiblemail.com) are also helping promote great mail piece design ideas and techniques. The better the design, the better the response rate, and the better the overall experience for businesses using the mail.
The DMA has a ton of research and data on direct mail, as do other associations and mail service providers. It benefits all of us to share success stories on direct mail and make the information available to others so that more businesses will use it.
In addition, it should be noted that the OIG study focus groups said marketers generally don’t proactively search for information on direct mail and would only encounter it if presented to them via resources where they typically engage (e.g., associations they belong to or industry events they attend). Those providing services around direct mail should be sure to engage with marketers through these types of venues to help educate them about direct mail and MSPs.
Nobody Does It Better
Ours is an industry rich with intermediary customer solutions providers to support businesses using the mail. Though the OIG did not include in its report information on how the use of professional mail service providers can help break down barriers to using mail, the mailing industry knows that nobody does it better when it comes to helping businesses use the mail than the professionals.
One of the barriers often cited when it comes to using mail is complexity, and the recent OIG report again brought that home. Many marketers said one reason they do not consider using direct mail is their perception that it involves a lengthy and inflexible process. They said that direct mail lags behind digital channels in terms of speed to market, and that the process involved in developing a direct mail campaign typically requires significant time and resources. Nearly half of the marketers surveyed said they would use direct mail more if the process of executing direct mail campaigns were simplified. Other barriers noted by participants included lack of easy-to-use mail piece design tools, challenges complying with mail specifications, difficulty understanding postage rates, and difficulty working with the USPS.
Now I know many in the industry may hear this feedback and dispute it, but keep in mind that this is the “perception” of marketers in the study, and as the quote goes, “perception is reality.” And I’m not sure how valid our defense would be that a communications channel that requires an acronym glossary to understand its rules, a 1,290 page (or 9 MB for the online version) Domestic Mail Manual that spells the rules out, and dozens of separate USPS publications and guides to detail all the intricacies of how to prepare and enter mail is not complex. Of course it is, and that’s why businesses should go to the experts who make it their business to understand it all, and why the USPS should better support and promote those experts.
Mail service providers — and that includes every business that provides services, software, hardware, and more to support the use of mail — are the true front lines when it comes to promoting the use of mail. They train their personnel on all aspects of mail and USPS products/services so that they can promote the use of mail and entice customers to use it. They can also deal with the complexities of the direct mail process.
It appears from this recent feedback from marketers that the industry may need to do more to develop customer-friendly and easy to use tools and ways to streamline and/or shorten the process leading up to a mailing campaign since marketers have identified this as one of the barriers to use. In the past few years, there has already been progress on this front, and according to a 2016 InfoTrends report, when marketers were asked why their use of direct mail has grown in the last two years, 36% responded the growth in use is due to direct mail being “easier to execute now.”
Some of the other barriers to using direct mail, which are cited by marketers in the OIG’s report and commonly heard by the mailing industry and the USPS, are related to the delivery service of direct mail. Inconsistent or unpredictable delivery service or unclear delivery service expectations are often-cited as barriers to using mail compared to other channels. While the responsibility of service standards falls on the USPS’ shoulders, there are many ways that MSPs and others in the mailing industry can help improve service performance of a particular mailing, such as drop-ship entry, address quality, presort and mail preparation, guidance on mail piece design, and more.
Reaching the Small Business Customer. The OIG’s report noted that fewer small businesses (those with five to 20 employees) use direct mail than larger businesses, with 31% of small business surveyed indicating they do not use direct mail, compared to between seven and 13% of larger businesses surveyed. The challenges for small businesses to design and use direct mail have been the topic of much discussion in the mailing industry for some years, and a host of solutions have been designed by the USPS and industry with small businesses in mind.
The USPS some years ago implemented its Every Door Direct Mail (EDDM) product for flats, and a similar product for letters may be in the works at the USPS. EDDM was designed to be an affordable way for small businesses to mail into local areas, with a mapping tool to target mailings by the age, income, or household size. There are also a host of industry mail service providers and others that offer a long list of services for small businesses, including those who provide one-stop shopping to design, produce, and mail pieces.
Despite the challenges in educating and instructing small businesses on using direct mail, it remains one of the strongest local advertising methods, projected to represent nearly 25% of US local advertising spend in 2017, with 21% of small businesses indicating they would increase their marketing budget spend on direct mail in 2017.
But the OIG’s report indicates that more is needed to educate the small business audience on the benefits of direct mail and the simple solutions that are available to produce and use direct mail.
The Time to Act Is Now
There has never been a better time to look at breaking down these walls than now, when there is growing momentum around the value of direct mail. According to the Data and Direct Marketing Association (The DMA), direct mail response rates are at the highest level in over a decade. USPS Marketing Mail (formerly called Standard Mail) remains a strong and vibrant communications channel and generated $17.6 billion in postage for the USPS last year, representing 54% of the USPS’ total mail volume.
According to the 2016-2017 NAPCO Research and Target Marketing Report, 25% of marketers are planning to use print (direct mail, magazines, catalogs, newspapers, etc.) as part of their marketing mix in 2017, representing the second largest spend category behind online marketing for customer engagement. Direct mail was the second most used medium for customer acquisition and retention. The top seven industries planning to increase their direct mail spending from 2016 to 2017 are real estate (50% increase), healthcare (42% increase), creative services and agencies (41% increase), financial services (40% increase), telecommunications (38% increase), manufacturers (37% increase), and publishing (36% increase).
The USPS is also doing more research around mail use and trends, and just recently published its annual Household Diary Study which analyzes mail received by consumers each year and their reaction to direct mail. The USPS also recently reported that mail engagement has improved since 2012 and that millennials are as engaged with mail as older generations. The integration of hardcopy mail and digital experiences is also fueling a renewed interest in direct mail, and with the fate of television advertising somewhat uncertain as on demand video channels flourish, there may be new advertising dollars available for the mail channel in the future.
So, lacking another recession or some significant postage price increase, the mailing industry is well-positioned to continue the momentum around the value and ROI from mail. But it’s up to our collective industry (including the USPS) to take advantage of these opportunities to grow mail — and break down some walls!
Kathleen J. Siviter is president of Postal Consulting Services Inc. (PCSi) and has over 30 years’ experience in the postal industry, having worked for the U.S. Postal Service, Association for Postal Commerce (PostCom), the National Association of Presort Mailers (NAPM), and a diverse set of clients with interest in the postal industry. She also serves as the Director, Community & Brand Development, for PostalVision 2020 (www.postalvision2020.com), an initiative designed to engage stakeholders in discussions about the future of the American postal system.