The Death of Direct Mail

By Alan Rosenspan

Let me give you a little background:

Right now, we are the dominant species on the planet; the largest in size and numbers; the masters of all we survey. But there's been some indication that things are not going the way we'd like them to. And a few of us have the foresight to look towards the future.

We don't like what we see.

Did I mention that we're all dinosaurs?

Today, I believe that direct marketing is undergoing its greatest crisis ever; one that it may not survive. So let's take a closer look at some of the pressures we're facing, and ask ourselves the question;

Is direct marketing a dinosaur?

Direct marketing has become the largest single form of advertising in the United States. It is also the fastest growing.

More and more of the world's largest companies are using direct marketing. More financial services companies. More packaged goods companies.

We seem to be making deeper and deeper inroads into the way the world markets its goods and services. And a growing pile of evidence arrives at our homes and offices every morning.

We have become a giant, a colossus, a juggernaut — just like the dinosaurs. That is why I would like examine one of the great mysteries of modern science, and ask the question...

What killed the dinosaurs?

Now I'm not a paleontologist and nobody knows for sure — but here are some possibilities, and how they relate to direct marketing.

Sheer size.

The dinosaurs may simply have grown too big. The same is true of direct marketing.

The average American receives something like 75 pounds of direct mail every year. And if you ever order from a catalog — that number can easily double.

We (or at least, we Americans) have pursued a volume strategy. The more we mail, the more customers we will attract. If our response rate goes down, we'll simply make it up in quantity.

That reminds me of the two men who buy a truckload of 100 watermelons for $200, and then sell them for $2 each. The first guy complains, "We didn't make any money..."

The second one thinks and then says, "Next time, we'll get a bigger truck."

The volume strategy has also led to cost reductions. After all, when you're mailing millions of packages a month (like several of my credit card clients), even a cost reduction of 1¢ a package can represent substantial savings.

But there's a price to be paid for sending out a relentless stream of cheap direct mail, over and over to the same individuals.

To paraphrase Winston Churchill: "Never have we mailed so much to so many — with so few responses."

The changing environment. This may have killed the dinosaurs too — and it's also happening in direct marketing.

To date, over 51 million American have signed up for the "Do Not Call" registry.

As my good friend Don Neal points out - when was the last time anyone ever got 51 million Americans to do anything?

• The Internal revenue Service can't get 1.9 million people to cash their tax refund checks.
• We can't seem to get 50% of qualified people to vote. (Or run for election, for that matter)

So why did so many people rush to the phone and plead that a telemarketer never call them again? And more importantly, what does this portend for the future of direct marketing?

It doesn't look good.

Their brains were too small. They couldn't adapt. Fortunately we can. And we're going to have to adapt very quickly.

The Direct Marketing Association in New York called 2003 the most challenging year in their history. Because besides "Do Not Call, " over 1,500 anti-SPAM and privacy bills have been introduced.

There is more consumer resentment, and even alarm, to direct marketing in all it's forms than ever before. And many people feel it's only a matter of time before "Do Not Call" evolves into "Do Not Send" or even "Do Not Market."

So what can we do? I have four simple suggestions:

1. We need better targeting.

For years, direct marketers have laughed at general advertising as being untargeted and inefficient. They don't test. They don't track the results. They don't even know who they're talking to.

...um, doesn't that sound like a lot of direct marketing these days.

Most companies seem to embrace a philosophy of...Ready, Fire!...Aim. But targeting the right people with the right message is probably the most important part of your direct marketing program.

Let me give you an example:
Just for a moment — imagine you work for the Acme Mortar Company. Not only do you make the best brick mortar, but you have a lifetime guarantee, and an irresistible offer.

So you create an exceptional direct mail package, and you send it
out to every household within 10 miles of your factory. Including the Three Little Pigs.

If you remember the fable, the first little pig's house is made of straw. The second little pig's house is made of sticks. And the third little pig's house is made of brick.

You are probably already ahead of me. The first little pig looked at the mailing, and said, "Not for me. I can't use mortar" The second little pig saw the brick house on the outer envelope, and threw it away without a second glance.

The third little pig looked the mailing over carefully, checked his brick walls, and said, "Very interesting — particularly if those rumors about the Big Bad Wolf are true"

With two out of three little pigs — the targeting was off. But one out of three is much better than most direct marketing packages, when it comes to reaching the right target.

Now poor targeting isn't just a matter of choosing the wrong lists. It is making the assumption that your direct mail must have "something for everyone" instead of being laser-focused on who will most need or benefit from your product.
John Watson wrote a terrific book called "Successful Creativity in Direct Marketing". He believes that the greatest failing in direct marketing is trying to talk to everyone, and not the small percentage of people who actually need or will benefit from your product."

So instead of trying to create a "one size fits all" direct mail package, why not try segmenting your list? Why not separate out those people who really need your product, or are worth much more to you if they buy?

Why not sell mortar only to pigs in brick houses?

2. We need irresistible offers.

My favorite movie about direct marketing is "The Godfather." Because of the famous line — "I'll make them an offer they can't refuse."

That should be the goal of your direct marketing program.

Just to clarify — the offer is not that you have low prices, or exceptional service, or the widest selection of products. Those are attributes of your company or your product.

The offer is the "extra something" you are giving your prospect to respond to your mailing.

In my seminars, I teach different ways to come up with an irresistible offer. My favorite is "The Offer that Money Can't Buy."

If can create an offer that your prospect can't get any other way, you have a much greater chance of being successful.

It could be a premium.

Advertising Age offered a free personalized mug — that had your name on it, identified as "Marketing Genius of the Year." This was several years ago — but I'm told that people still call up and ask about these mugs.

Your company may even have information that money can't buy. For example, I offer a booklet called 101 Ways to Increase Response.

There are many different valuable books on direct marketing and a wealth of printed information, but there's only one way to get that specific booklet - from me. Over 7,000 people have requested it.

So if you can come up with an offer that money can't buy - you may get an excellent response.

3. We need breakthrough creative.

As Seth Godin writes in Permission Marketing, most advertising is "interruptive." The TV commercial interrupts the program. The print ad interrupts the magazine article.

The ad has to be more interesting than what it interrupts, or else you won't give it your attention.

But direct marketing has to work even harder than that.

We have to gain a person's attention and captivate their interest,
but that's just the beginning. We have to do everything that general advertising does — and one thing more.

4. We have to get people to act.

Our job is to get people to fill out a reply card or application, go to a website, call a toll-free number, or bring in a coupon to a store. And that takes more creativity than any other form of advertising.

Despite this, the vast majority of direct marketing packages are uncreative, uninspiring and dull. How often do you receive a piece of direct mail that you think is terrific?

And that's a real shame. Because when you think about it, direct mail should be the most creative medium of them all.

I cannot overestimate the importance of great creative work. We all have access to the same lists. The same media. The same printing and production techniques.

Great creative becomes the only real point of difference between your mailing, and any other company's mailing.

We need to hire better, train better, and never stop improving

So, in conclusion, will Direct Mail go the way of the dinosaurs? My answer to you is that I hope so.

Evolution, which damned the dinosaurs, will continue to affect each and every one of us. Only the strong will survive.

Because, as you may know, the dinosaurs are not really extinct. The worst of them did die off.

But many did evolve, into the beautiful, breath-taking creatures that we call birds.

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