In 2020, marketers prioritized direct-to-consumer (DTC) models to stay profitable; adopting an evolving direct response strategy for DTC success. Consumers loved it, prompting an uproar of excitement from ambitious entrepreneurs as more and more DTC brands introduced themselves to the marketplace.
U.S. DTC e-commerce sales will see double-digit increases through 2024, and U.S. DTC buyers will grow to reach 111 million in 2023, according to a report from Insider Intelligence. Yet, new customer growth doesn’t always equal DTC profitability.
The influx of DTC brands since the pandemic has created a crowded, competitive market. Mounting competition, consumer privacy regulations and operational expenses have dramatically raised marketing and customer acquisition costs, quickly outdating the DTC marketing playbook of 2020.
5 Tips for an Effective Direct Mail Campaign
- Use customer data to create personalized messaging.
- Offer exclusive discounts, events or rewards to build customer loyalty.
- Send timely messaging based on customer activity.
- Coordinate your direct mail messaging with your digital campaigns.
- Use mail campaigns to solicit customer feedback and retain customers.
In turn, DTC retailers are looking at many of the tactics that have been embraced by other DTC startups to juice growth. Enter direct mail marketing.
The throwback marketing strategy has a higher return on investment than other marketing efforts like email or social media advertising, according to a 2022 Association of National Advertisers report.
In this new era of DTC competition, incorporating direct mail into other direct response strategies can help consumer brands improve customer experience and drive recurring engagement that will allow them to tap into scalable growth profitability.
Why Direct Mail?
Despite the increasing prevalence of digital marketing, consumer preference for direct mail has not declined in recent years. In fact, some studies show that the largest consumer groups, such as millennials and Gen Z, are more inclined to respond to direct mail because they value individualized and relevant communications, or find receiving physical mail in the digital age novel. Additional industry research has found mail to produce a higher response rate and ROI than many of the most popular digital channels.
Offline consumer data allows brands to build highly personalized and tailored direct mail campaigns, while printing technology and other industry advancements allow for quick-triggered programs based on customer activity. Just like digital tactics, mail can deliver relevant and customized messages to the appropriate individuals to create a lasting impression and maximize direct response campaign performance.
How Direct Mail Can Create Growth
Limited resources and intense competition among the DTC marketplace make it challenging to acquire and retain customers. Leveraging your marketing efforts to incite incremental growth is essential for a DTC brand’s long-term success.
Direct mail can be an effective marketing channel for DTC firms seeking profitable growth. For brands with prior mail experience, targeting new demographics to diversify mailing lists is one potential growth strategy. Consistently testing new audience models and using multiple data sources when creating direct mail lists will help you diversify your mailing lists. Insightful campaign analytics and response tracking will help ensure that brands reach the intended audience and achieve desirable results.
Another approach is to combine direct mail with digital channels, such as email marketing, social media and programmatic advertising tactics to create an integrated campaign. This can increase brand awareness and conversions across multiple channels.
USPS research shows that combining digital and direct marketing tactics can result in a 68 percent increase in website visits, a 63 percent increase in response rates, and a 60 percent improvement in return on investment. Utilizing more than one channel can also lower the cost per acquisition and enhance the marketing campaign performance, making it cost-effective for obtaining new customers.
Incremental growth is possible for new mailers, too. It just requires time and collaboration. Young brands should start with a small direct mail test campaign, such as a shared mail program, and analyze the results. This can include sending direct mail to a targeted group of customers or prospects, measuring response rates and adjusting messaging and creative design based on performance. As the campaign proves to be successful, you can increase mailing volume with a solo campaign and further optimize your mailing list to drive incremental sales.
Direct Mail Campaigns Improve the Customer Experience
The DTC competitive market is fierce, and consumers will happily shop around to find a brand that provides the positive experience they are looking for. Effective messaging in your marketing tactics will build trust, loyalty and advocacy among your audience.
An effective direct response strategy for DTC profitability involves leveraging the mail channel's ability to deliver personalized, engaging and targeted messaging, valued by seasoned direct marketers for its historical success. The quality customer data can be used to reach your best prospects with customized messages and design elements. Segmenting audiences to tailor messaging to specific groups based on interests, purchase history, or other factors will provide a more relevant and engaging experience. You can also examine previous performance results, paying close attention to the mailing frequency to ensure timely communications.
Leveraging offline data is a powerful way to enhance online marketing programs and target the right audience on their preferred channels. This approach allows you to tap into new channels while utilizing reliable targeting data, instead of relying solely on social media algorithms. By doing so, you can deliver a customized experience to your most valuable audience, which leads to better engagement and improved ROI. Additionally, implementing this strategy safeguards your budget and helps you maximize your spending, which ultimately drives profitability.
First-time mailers can lock-in positive customer experiences by fostering a sense of excitement and anticipation. Direct mail marketing is a tangible medium, which immediately creates a memorable and engaging brand experience. Physical mail provides an opportunity to launch a new product or service in a creative and visually appealing way, building interest and enthusiasm.
Additionally, brands can encourage repeat purchases and customer loyalty by offering exclusive promotions or rewards to their customers. As a result, DTC businesses differentiate themselves from competitors and build long-term customer relationships.
Drive Recurring Engagement Through Direct Mail
According to a recent DTC metrics report, repeat customers account for 60 percent of revenue in the DTC sector. Since retaining loyal customers is often more cost-effective than acquiring new ones, a direct response strategy for DTC profitability must prioritize initiatives that drive recurring engagement and customer retention.
Triggered mailings are a useful tool to personalize messages to consumers based on their behavior or actions. They can help recover abandoned carts and send reminders or special offers to improve conversion rates and customer experience. Automated offline retargeting campaigns can also be run alongside digital campaigns using automation to retarget interested customers and leads who haven't made a purchase. This increases the chances of conversion and provides a seamless multi-channel experience.
Showing appreciation to your customers with exclusive discounts, early access to new products, or special perks for referred friends and family is the kind of special treatment this prized customer segment is looking for. This is also a great group for experimentation with different mailer sizes and formats, helping determine what creative elements may work best for new customer acquisition tactics. You can also use your retention mailings to solicit customer feedback. Not only do brand loyalists want to feel like they are part of your product development team, but it allows you to use their evaluations to improve products, services, and the overall customer experience.
New to the channel? No problem. Recurring engagement can be driven by creating a strong and alluring call-to-action. Encourage customers to sign up for a subscription service, join a loyalty program or come to an exclusive event. Brands should also prioritize the preferences of relevant age groups. Since millennials prefer experiences over discounts, consider incorporating direct mail offers or rewards that entertain. In contrast, Generation Z prefers interactive content to keep them interested.
As with any marketing channel, there are some risks to direct mail campaigns such as the initial investment and ongoing testing costs. Still, DTC brands can use direct mail marketing and direct response strategies to strengthen their customer relationships to establish long-term customer loyalty and protect their profitability.
