Tom Lemke is the CEO of BBG-Global with more than 30 years of retail marketing experience, having served as the CMO for several multi-billion retailers. A pioneer in leveraging data to drive customer communications, Tom has extensive experience in customer centric marketing, development of loyalty programs, usage of customer data, analytics and modeling to improve business performance.
We reached out to get his perspective and insight on the direct mail industry and how it relates to the retail space.
In the second half of our two-part series with Tom Lemke, he explains how our understanding of the retail renaissance can and should impact how we think about our direct mail marketing.
Technology Meets Renaissance
In an effort to put the customer first and improve the customer relationship in today’s retail world, many programs and strategies have been created. Programs like CRM, Omni-channel, Customer Experience Management, Loyalty Programs and many others. New and emerging technologies enable these types of programs and can indeed help with the renaissance of making the customer number one.
The secret sauce is knowing as much about the customer as possible and then using that data to create targeted and personalized offers. With technology, the data that can be collected by retailers about their customers can be used to create truly relevant messaging that can drive a much better customer experience and relationship. The collection of data and using it can even be instantaneous. Think about when you are searching for a product on the web. Immediately, you are bombarded by digital ads for the same product from other online retailers. But, if you don’t click on that competitive ad immediately, it is gone. The amount of time the customer has to digest the ad and evaluate it is quite limited. And, therefore, the response and sell-thru rates often do not meet the retailer’s expectations.
The Renaissance of Direct Mail
What’s “old” is becoming “new” again with retailers using direct mail. Not so long ago, the term “snail mail” was the buzzword of the day and implied that traditional direct mail was a dying media channel. At a recent digital marketing conference, a young speaker showed how his company was now using “snail” mail. He was actually shocked to learn how well it was working for his company. The renaissance of direct mail is here.
According to the Direct Marketing Association, 80 to 90% of direct mail is opened today. Almost 60% of consumers state that they enjoy getting direct mail from the brands they are interested in. Fifty-six percent stated that they either went to the physical store or online to make a purchase as a result of the direct mailer.1
The response rate to direct mail is higher than other media at 5.1% (compared to .6% email, .6% paid search, .2 online display, .4% social media)2.
And direct mail is the leader in creating an important emotional connection with customers. Fifty-six percent of consumers stated that printed direct mail was their most trusted form of marketing3. So direct mail is not dead. Rather, there is a renaissance of direct mail with today’s retailers. Even onlineonly retailers have come to recognize the power of direct mail. And, Omni-channel, where direct mail is used with other media, is even more powerful.
Personalization is Key
Direct mail also provides an ideal marketing tool for retailers to personalize their offers to their consumers. Consumers are much more likely to respond when an offer to them is personalized. Adding a person’s name, fully variable color images and more sophisticated database information can increase the response rate by up to 500% vs. not doing any of these things.2 The effective use of data is critical to effective direct marketing. Forty percent of a direct marketing campaign’s success is in the data3.
Retailers need to leverage all of the transaction and loyalty data that they collect and use this data to drive personalized communications. Both sheet fed and now web printing technologies make high volume personalization not only possible, but also very efficient. Targeting customers on a 1:1 level with highly personalized offers can also increase response rates by up to 50% or more.3
The Bottom Line
The Retail Renaissance is alive and well. What’s old is new. What’s different is that new technology can take the old and make it new again. One example is the renaissance of direct mail. Consumers still open, read and respond to direct mail better than any digital media. They also respond even better to personalized mail. Loyalty data and new printing technologies provide retailers with a cost-effective method to deliver truly relevant direct mail to their customers. Today’s retailers should evaluate how the old fits into their new strategies. The retail renaissance is here!
- Small Business Trends http://smallbiztrends.com/2017/01/direct-mail-marketing-statistics.html
- DMA Response Rate Report http://thedma.org/
- Canon Solutions America http://csa.canon.com/