Can a sophisticated technology be used to improve the results of what we think of as an ancient marketing channel? Before I tackle that question, I probably should address the question of “Who cares?”.
Like it or not, direct mail is here to stay at least for the foreseeable future. There was an interesting piece on direct mail and big data that says while snail mail in general has decreased over the last 10 years, the number of offers mailed by marketers has remained steady. It goes on to elaborate on how big data and targeting are being used for direct mail. If you have siloed this channel in your marketing mix, well, it may be worth a revisit.
With the heavy concentration on online interactions, we hadn’t focus on applying big data and predictive analytics to another interacting channel: direct mail. This is not until we started getting requests from some of our clients. In most cases we just used attribute data, but no multi-channel or event data. We were pleasantly surprised to discover that big data and predictive analytics can produce great results for direct mail. In certain situations, we found a 100% improvement over random targeting and a 10-20% improvement over sophisticated targeting. I’m certain that enriching the data with other channel data and event data would produce even better results.
On the flip side, it must be noted that big data and predictive analytics are not beneficial in all direct mailing situations. If you want to blanket an offer to everybody across a city, then, either simple targeting or no targeting will suffice.
We found two situations where big data and predictive analytics are beneficial. First, for the profit margin conscious, if you have an offer that you wish to target to those most likely to buy, thus increasing your overall response rate for the amount of direct mail sent. Secondly, those direct mail campaigns that have many different products or offers, and a desire to target them to customers most likely to respond, thus increasing your overall response rate.
The net/net is that even an old fashion marketing approach can make use of the latest technical and analytical approaches. Long live Direct Mail.