Direct Mail

Changing the Subject (Line)

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One of the reasons e-mail marketing has become so huge is because it’s so darned cheap. Compared to postal mail, e-mail costs just pennies. That means most marketers can achieve a better ROI for just a mediocre e-mail campaign compared to even the most successful direct mail effort.

However, a common complaint about e-mail versus postal mail is visibility. Since most viewers choose not to have their preview pane feature turned on, they must physically open an e-mail before they can view any of its contents.

This “one-step removed” dynamic means that many people never get to see and read a marketing message that would otherwise stand out if it showed up in someone’s postal mail delivery as a postcard or self-mailer promo piece.

In this scenario, the e-mail subject line becomes a huge “gatekeeper” element. What the subject says and how it’s said can make a difference in e-mail open and clickthrough rates. But just how much?

A new E-mail Marketing Metrics Report from MailerMailer, a firm providing e-mail marketing and newsletter services, provides some interesting clues. MailerMailer has been producing these reports since 2003. This report, the tenth one issued, was developed by analyzing a sampling of ~900 million e-mail messages sent through MailerMailer throughout the year 2009.

Among the elements tracked were the words used in e-mail subject lines. MailerMailer found that the most popular terms contained in the subject lines were:

 Coupons
 Daily
 Free
 News
 Newsletter
 Report
 Today
 Update
 Week (weekly)
 Year

Notice how each of these terms conveys a sense of WIIFM (“what’s in it for me?”) and/or a sense of time sensitivity. Interestingly, despite a prevailing concern that using the word “free” in the subject line risks more spam filtering, MailerMailer found that this term was one of the ten most popular terms used in subject lines during 2009.

And what about subject line length? The report found that shorter subject lines (containing less than 35 characters) outperformed longer ones. That’s generally just four or five words along with the corresponding spaces between them.

And the difference MailerMailer observed was significant: E-mails with shorter subject lines experienced an average open rate of ~17.5%, while those with longer subject lines had an open rate of only ~11.5%.

The same differential was found with clickthrough rates. For the e-mails with shorter subject lines the average clickthrough rate was ~2.7% … versus ~1.6% for e-mails with longer subject lines.

The MailerMailer report concludes that while composing shorter subject lines may be difficult to do (well), going through that exercise is well worth the extra effort. The results from ~900 million e-mails prove it.

How the B-to-B Sales Process is Changing

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In my 20+ years in industrial, commercial and other non-consumer marketing communications, I’ve witnessed more than a few “big trends” affecting the nature of the selling process in the business realm.

One of the biggest of these is the approach that customers take when evaluating products and services they might be interested in purchasing. Recent research findings about these behaviors has been published that sheds more interesting light on where things are at the moment.

A survey of ~300 B-to-B managers was conducted in late 2009 by e-Research for Marketing (E-RM) for Colman Brohan Davis, a Chicago-based marketing organization. This survey, which was limited to respondents age 35 or younger, found that only a few of the 13 tools used to research products and services represented “traditional media” – print-based resources, trade shows, or consulting with industry colleagues by phone or in person.

Furthermore, the study found that even these four tactics are losing their importance compared to the use of online social networks, which were exploding in usage.

These survey results reminded me of a comment made by Adam Needles, director of B-to-B field marketing at Silverpop, an e-mail marketing company based in Atlanta. “Somewhere around age 30 to 35, you can draw a line in the sand between people who are used to calling around to get everything and [where it’s been] all about relationships face-to-face.”

In contrast, Needles has this to say about younger staffers who conduct a great deal of the buying cycle online: “You have people whose expectation is that companies should put everything on their web sites; they should be getting real-time feeds and information, and companies should be totally integrated into … the blogosphere.”

Younger staffers tend to be influencers more than decision-makers. But this is not to diminish their importance, as they are the ones charged with conducting the research and drafting investigative report summaries and preliminary recommendations. Ferreting out information through resources like webinars and social platforms such as Twitter and blog posts, while it may seem exotic and less consequential to older colleagues, is not at all foreign to these staffers.

And we shouldn’t forget that today’s “influencer” at a company is very likely tomorrow’s “decision-maker.”

Which gets us back to the ER-M study. One big takeaway from that research was that customers are looking into all the corners of offine and online communications to find the information they feel they need to make risk-averse and “CYA” decisions that are also the successful ones that pay off well – hence building their reputations inside their company.

Tactics like direct mail marketing may seem old-hat or even quaint, but they can still be quite effective, while e-mail marketing, while fast and cheap, elicits resistance from some because they feel inundated with marketing materials that are irrelevant to their needs.

I guess it’s yet more challenging news for already-fractured marketing communications program tactics that continue to be under tight budget constraints.

What’s the very latest on e-mail open rates?

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Here’s an interesting factoid to consider: there were an average of 247 billion e-mail messages deployed each day during 2009.

With the plethora of commercial e-mail communications – accompanied by groaning inboxes and all – it’s only natural to wonder if what’s happening to the ones you send correlates to the experience of others.

The Direct Marketing Association helps answer that question with the results of a survey it just completed. The DMA’s 2010 Response Rate Trend Report, conducted with ~475 respondents in March and April, is the group’s seventh annual survey. It found that average open rate for e-mails sent to a company’s “house” e-mail database list is just under 20%, while the clickthrough rate from the e-mail to a web landing page is ~6.5%.

And the average “conversion” rate – taking whatever additional action is desired – is ~1.7%.

[Those figures are for “home-grown” e-mail databases. The percentages would be lower when working with outside/purchased lists.]

How does e-mail performance compare to response rates encountered in direct mail marketing pieces? The DMA research studied that, too. These days, direct mail response rates are running about 3.5% for house lists … but less than half of that (~1.4%) for outside prospect lists.

Commenting on the survey findings, Yuri Wurmser, the DMA’s research manager, said, “Traditional channels are holding their own in terms of response, but it is a multi-channel market out there where everyone is using a lot of different channels,”

Amen to that.

The DMA survey also found – not surprisingly – that while response rates for B-to-B campaigns tend to be higher than consumer campaigns, e-mail tactics are used less often for direct sales compared to postal mail. Which goes to show that despite their added costs and longer lead times, traditional direct mail marketing techniques still have a role to play in the marketing mix.

And what about telemarketing? The DMA survey reveals that outbound telemarketing to prospects provides the highest response rates — around 6% — but also the highest cost-per-lead at more than $300.

A full report is available for a fee from the DMA, and can be ordered here.

Interesting ROI Trends in Direct Marketing

Phillip Nones Uncategorized , , , , , , , , , , , , , ,

What’s happening in the world of direct marketing these days, and where is the best ROI to be found?

Certainly, a lot of inboxes are positively groaning under the sheer quantity of e-mail volume, and many people have responded by beefing up their spam filtering. But the most recent economic impact study conducted by research firm Global Insight for the Direct Marketing Association reports that commercial e-mail marketing delivers the best bang for the promotional buck – more than $43 for every dollar spent on it.

By comparison, ROI from Google AdWords and other paid search advertising activities generates about $22 for every dollar spent.

According to the analysis, postal direct mail initiatives deliver lower returns on investment — with catalogs returning just a little over $7 per dollar spent and other forms of postal direct mail around $15.

Depite its stellar ROI numbers, it is true that e-mail marketing is actually showing a slight drop in ROI. And that is forecast to continue to decline in the upcoming years, at least partially because of the reasons noted above. Even so, e-mail is forecast to deliver an ROI of ~$38 for every dollar invested in 2013.

Of course, it’s important to recognize that search marketing is where much of the heavy action is these days. Internet search drives ~$244 billion in sales as compared against a related cost of ~$11 billion.

Commercial e-mail? It drives just ~$26 billion in sales … although the cost to drive those sales is a relative pittance at ~$600 million.

And over on the postal side of the ledger, no one should be surprised to learn that direct mail expenditures, while still large at ~$44 billion, are down ~16% in just the past year alone.

[But you can look on the bright side: Your promo piece is going to be noticed a lot easier among the smaller stack of daily snail mail that’s being delivered!]

What?! A Reduction in Postal Rates?

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The first class postage rate is going up again this month. But not so fast! The USPS is actually having a sale on postage as well.
The new first class postage rate is going up again this month. But not so fast! The USPS is actually having a sale on postage as well.
Death … taxes … rising U.S. postal rates. It seems all three of these things are just a given. And the USPS is getting ready to up the price mailing a first-class envelope another 2 cents, effective next week.

But hold on! Because it’s suffering from a significant decline in mail volume approaching 15%, the USPS is concurrently rolling out a special program heretofore never seen from this most politically tin-eared of government agencies. The impressively named Saturation Mail Incentive Program gives large standard mail direct marketers who increase their mailing volumes the opportunity to earn per-piece credits — discounts essentially — on their mailing activity.

The discounts themselves are rather small — ranging from 2.2 cents per nonprofit letter mailer to 4.0 cents per flat piece (catalog).

… And the “fine print” conditions as to who actually qualifies for the discounts are almost byzantine in their description.

… And the savings are for a limited time only (~1 year) beginning this month.

… And program participants must formally apply to the USPS for approval.

… And they must do so by June 11 or lose their opportunity to participate at all.

… And, and, and … Well, you get the idea.

But the fact that the postal service is actually throwing a “sale” on rates is big news in and of itself. When has this ever happened before?

Quoting the eloquent words of USPS spokesperson Michael Woods, “The Postal Service is always looking for ways to use our pricing flexibility to improve business, and the current economic climate makes that more important than ever.”

Translation: “We’ve lost a pile of business in the economic downturn, and maybe if we lower our prices, we’ll get some of it back.”

Good luck.

We’ll check back after a few months to see how things are going. Judging from the most recent financial results published this week — a quarterly loss of nearly $2 billion — we may not see much improvement. After all, the USPS has managed to make money in only one quarter out of the past eleven!

UPDATE (5/18/09) — The USPS has now finalized the program, which will now launch July 1. Details are here.