Whether you’re an owner of a direct mail service business, print for direct mail customers, or you own a specialty marketing firm and provide campaign consultation from concept to response measurement, our industry is constantly changing. Your ability to adapt to these changes depends on your ability to evolve, offer new products and services, and deliver these services faster.
Direct mail and related businesses face different challenges than they did yesterday. And they will face new challenges tomorrow. Politics, the economy, demand for internet advertising, etc. all impact our businesses, and the demand for our products and services. We therefore must continually stay tuned to forecasts and trending data to make smart changes on how we run our businesses, and what we offer our customers. Conversely, running a business without planning for change in the marketplace is a short sighted and dangerous business strategy. Direct mail service providers are in no different a business than any other. Like so many other industries, the direct marketing industry is evolving and so must the businesses within it.
The Cold Hard Facts
Numerous trending data sources forecast a flat or declining demand for direct mail through 2020, while demand (at least in the short term) for email marketing is on a sharp incline. According to Borrell Associates, the future of direct mail is threatened by the soaring popularity of email marketing combined with problems facing print and mail delivery. Borrell Associates estimates a 39% decrease in direct mail advertising revenue from 2008 to 2013. They estimate advertising revenue in direct mail to decrease from $49.7 billion in 2008 down to $29.8 billion in 2013.
Not only is postal revenue to the USPS shrinking, the number of delivery points, and hence cost to the USPS, in continually rising. In 2007, the USPS delivered approximately 226 billion pieces of mail. Today, they are mailing approximately 170 billion pieces of mail. This equates to a 20% decrease in postal revenue. Additionally, on average, they add between 1 and 1.3 million new delivery points each year.
The current economic pressures are causing many companies to more carefully choose how they invest in advertising. Businesses are testing a variety of online digital mediums, i.e., PPC (Pay Per Click), banner ad placement, email marketing, SEO (Search Engine Optimization), Social Media, and other online efforts.
Consumers are getting their information from a wider variety of sources, namely, websites, social media networks, email ads, smart phone apps, etc. It’s only natural that for businesses to see mixed results as newer mediums take shape. Therefore, what’s worked before, may not be working as it once did.
The Good News
- Unlike many mediums of advertising, direct mail is extremely measurable. The response speaks for itself.
- Many businesses that have left direct mail are finding their way back after lack-luster results from attempts to develop their SEO and PPC campaigns.
- There are industries that continue to mail with great success.
- Your current, most valuable asset is the relationship with your customers. Add new complimentary products and services to your mix and keep your customers coming to you for more than before.
- Advanced technology is bringing about far greater targeting and efficiency, which, ultimately result in greater response and measurements.
Some of the changes you may want to consider are as follow:
1. Add new products and services to your existing business such as mailing lists, email lists, database hygiene, enhancement, pay per click Advertising, Social Media management, web banner advertising, SEO services, and website creation.
2. Outsource certain services so that you’re focused on the relationship development of your existing and new customers while the existing and new services can be completed by your partners with greater efficiency.
3. Do your research so that you’re adding products and services to your menu that have growth trajectory.
4. Consider your client groups and “don’t put all your eggs in one basket”. Instead, add new, small customers rather than focusing on that one “big one”.
5. Develop your online self-serve services such that your customers can access your products and services anytime and from anywhere. Even if your site does not have a merchant check-out, adding inventory of your products and services helps gain traction among site visitors.
6. Evaluate your competition and learn about the various new products and services they are offering. Try to better understand the changes within the marketplace by what others are anticipating.
7. Ask your existing customers where their direct mail budget is being spent if they are buying fewer services with you than they did before. Develop campaigns to “re-connect” with past clients and introduce these new products.
8. Reposition your “brand image” so that you’re viewed as progressive and “up-to-date” with marketing. Include your new products and services.
9. Update your website to include both “buying” opportunities, but also “learning” opportunities. Consider how we buy online. For many purchases, the first thing we all do is research our options, familiarize ourselves with what’s available. If the keyword we plug into the search bar doesn’t bring about the items we’re looking for, we’ll make and adjustment to that search keyword and refine our search results. This process allows us to view many options available and many times, the ultimate buy decision is decided after first reviewing all the available options. So, getting visitors to come back to your site by including value “learning” content will not only foster a relationship between your brand and the prospect, but also increase your conversion rates over the long-term.
Stay Connected with Your Customer Base
Stay connected with your customers is key to understanding how they are evolving, and especially, how they are not. Your focus should go well beyond printing and mail delivery. Your primary focus should be the development of a better understanding of your customers. How successful are your business customers as a whole? Are they experiencing a diminishing return on their marketing dollars? Are they facing new competition? What other mediums are they using to draw attention to their brand? Essentially, will they be in business in the next 2 to 3 years, and how can you stay involved with their ever changing business so that you’re around with them as the change.
There are a number of immediate actionable items you should begin with immediately. Namely:
- Provide an account review with your business customer to include their expenditures with your company, the results of their campaign response by campaign (if you capture this), recommendations of changes to their creative, targeted audience, and data hygiene.
- You can provide them with education to give them more insight on their market. Using your data source, run a count of businesses within their market territory. What else can you give them that will help them better understand their market?
- Stay connected by keeping track of their efforts, their initiatives, and their progress to reaching their goals. Develop your business service model to complement their needs.
Know Where the Business Is Going
Are you losing business to your competition or is it that the businesses you serve now buying other products and services to fill the same needs you once did? In either case, you should know intimately where your customers are now being served. And not just where they are buying from, but you should familiarize yourself with the products and services they are now buying. This kind of research and development, albeit painfully time consuming, is far more valuable than carrying on your operation blindly. Then you should be asking yourself, “Can I offer these same products and services”? Can I outsource the delivery of these products and services and make a profit? And, at the very least, do these products and services provide a superior value as compared to what I’m selling?
A lot can be learned from your competition via surveying your customers. Even if you’re only able to reach out to a few of your good customers, asking the questions themselves helps in developing the bond between you and your clientele. It shows you care to take the time to learn about them.
For the most part, businesses make logical buying decisions, where consumers are more apt to respond to an emotional appeal. But when you’re asking for help in understanding a client’s needs for the sake of making smarter, more value added changes to serve the customer, the message is very loud and clear. It’s says you take responsibility for their success, and take it seriously. This is not only a powerful message but one that most all business owners can appreciate.
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