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Email Vs Direct Mail - Which is better for conversions and your business?

Posted on 23 January 2014 by
Category: Digital Marketing

I was asked a question on LinkedIn when I posted an article about email marketing, Paul Green asks “Do you have any useful statistics on the impact of newsletters and/or typical open rates, click-through rates? Or may comparisons with the effectiveness versus snail mail, advertising, leafleting, etc.?”. Well Paul, I think a good comparison is between email and direct mail / snail mail, both marketing tactics have similar properties and attributes that we can compare and get some industry averages for.

What we are looking for here is a conversion from prospect (i.e. someone on your list) to a sale/lead/conversion goal, which gives a better return on investment.

Conversion variables to consider

Obviously the success of any campaign has many variables that will have either a positive or negative impact on the results, both Email and Direct Mail share the following variables.

How qualified is your list?

Are the people you are mailing within your customer personas? Have they purchased from you before? Are they knowingly looking for your product / service? How fresh is the list?

The quality of your offer

Making a poor offer will get lower conversion rate that an unbeatable offer, this goes without saying (but I said it anyway!), so compared with your competitors how would you rate your offer when putting yourself in the mindset of your customer personas?

How good are your sales staff working on the leads?

Now this might be actual sales people or in the case of online sales, consider your ecommerce store as a sales person, it needs to work as hard to get people to buy as someone on the end of the phone or on the forecourt of a car sales garage does. Their quality will affect the overall conversion rate.

Brand value perception

How strong is your brand's value perceived within the list you're mailing? Are these people completely unaware of your brand that you're introducing to them? Or have they had multiple contacts, may be seen TV advertising or heard your company on the radio? All these factors will affect the perception of value and change the conversion rate.

Timing is everything

Is your product / service seasonal? Have your mailed out near or just after pay day? When do your customers typically buy? For example Domino's pizza will have order increase whilst a big football game is on, or the final of X Factor, so email marketing an hour or so before would yield a better return than email 10 days before.

Have you got the right content?

The content of your email or direct mail will alter the conversion rate, lot’s of testing a reiteration need to go into getting the optimum:

  • Subject line / Envelope
  • Message - Greeting, main body, footer
  • From line (email)
  • Layout and imagery
  • Typography
  • Call to action

Top Tip: Remember that different customer personas may require differences in the above, so take time to plan for each of them.

Personalisation really matters

Getting a generic email or direct mail piece is pretty, well, generic - so if you have the person's name, use it. An email that opens with, Hi John, will convert 57% higher than non-personalised. I would hazard a guess at a similar statistic for direct mail too.

Response rate averages

Data from the 2012 Direct Marketing Association benchmarks report that direct mail offers response rates of 1.1 to 1.4% versus 0.03% for email, 0.04% for Internet display ads, and 0.22% for paid search. This is a simple response to the marketing piece, not a sale. You’re conversion goal might be visability and not sales, so you also need to think about what the goals are for your campaign before you set out, so you can track the right conversions for you.

Return on Investment

On of the major factors in email marketing is the cost, it’s so cheap. We use MailChimp for emails and for free you can email a list of up to 2000 subscribers, a for a few dollars a month you can be emailing tens of thousands. If you want to do the same with direct mail, you can probably times that cost by 100.
There is of course a good argument that in a world of digital we do love receiving tangible items. So direct mail could yield a better response rate, but the ROI might be lower, however the long term relationship with that customer that was sparked off by the memory of a great direct mail piece pay pay dividends later down the line. That’s a little bit harder to predict, but very trackable if you are saving the source of each customer.

Summing Up

Well Paul, I think I have answered your question with more questions, but this is the reality of the situation, there are so many variables that go into the conversion rate and return on investment it. The takeaway point from all of this is to try both methods, using SMART goals for each tactic, so you can test on your own business which works best for you. If you want quick and lower budget head for email marketing, if you have more budget and the right product / service then direct mail could be the one for you. Build, Send, Track, Report, Analyse, Reiterate, ReSend.

 

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