A near-capacity group of industry professionals came to hear the following:
• What are the trends and upcoming changes in Direct Mail Рand how will they impact a printer who is focused on DM?
• What is the impact of DM in tough economic times?
• How are the marketers being effected by environmental concerns?
Laurene Cihosky, senior vice-president, Direct Marketing, Advertising and Publishing Business for Canada Post provided an outlook on DM backed up by historical data, current volumes and projected future potential.
Cihosky began with a historical view of addressed Admail growth. Canada Post statistics tracked from 1984 – 2007 show steady and significant volume growth from 1984 to a peak in 1998, then a dip in 1999. From 1999 to 2007, volumes have dipped and risen, remaining at levels consistent with the mid to late ‘90s and showing increases for 2006 and 2007.
In addition to the trending of marketing initiatives, the following, says Cihosky, are the key factors impacting the direct mail industry:
• Government legislation
• Technology advancements
• New Media/Channels
• Generational changes
And the lasting underlying trends are the environment and the economy.
The recent government ordinance that has contributed to today’s growth in direct mail is the Do Not Call legislation. The Canadian experience with the capture of marketing share from the fallout of this legislation is anticipated to be directed to brand, promotions/events, direct mail and online media. For direct marketing alone, CMA research for Stats Can shows some staggering numbers:
• Drives over $160 billion in economic activity
• Employs 900,000 Canadians
• Raises millions of dollars in the Not-for-Profit sector
• Supports over 20% of the economy as a primary marketing tool for small businesses
The future is now
Technology has delivered the robust tools of direct mail. A gradual progression of utilization of those tools has lead to increased customization and integrated multi-media communications. The future marketing landscape continues to be consumer driven. Merchandisers and consumers are engaging in a two-way dialogue. Merchandisers are identifying what individual consumers want and are looking for campaigns that deliver and are measurable – DM delivers and it can be measured. The media will continue to need to work harder at delivering information to empowered consumers. These consumers want offers that are individually unique, available when they want to view them. There is also a measurable increase in consumers’ demand for environmental responsibility.
The direct marketer’s future reality is most certainly relevance. The ability to manage the customer experience with highly customized communications that are event triggered and digitally enabled will return a measurable benefit. Direct Mail continues to demonstrate the robust ability to deliver. And, the tactability of mail does continue to enhance the response.
Canadian attitudes towards the environment and mail
According to Canada Post statistics of 2008, 75% of Canadians say that environmental conservation and preservation is becoming more important than it was a few years ago. And 77% of the respondents to the study believe the responsibility for the environment must be equally shared between industry, government and individuals. As environmentalism continues to become more mainstream, the attention to waste will only increase.
It is not perceived as waste or junk if it is something someone wants. Cihosky points out an interesting difference between Americans and Canadians toward mail and catalogues. In the U.S., there is a huge proliferation of catalogues that end up in household mailboxes. There are about 13,000 catalogue titles in the U.S., and statistics show that this marketing overload often ends up in landfill. The Canadian outlook is different. First of all, the volume of direct mail in general is considerably less than in the U.S. with only 11 catalogue titles that regularly mail in Canada. Secondly, what is received is considered more relevant. Thirdly, Canadians do perceive that relative to other environmental drivers, mail and catalogues are seen as less harmful.
Environmental advocates are leading the charge toward green. One of the components of “green” relates to forest ethics and endangered forests. Advocates and consumers have developed a “nice” list with the following key elements:
• No endangered forest products
• FSC certification
• Recycled content
• Reduced emissions
• Paper reduction
An underlying factor that is most critical is that your green claims are not false, misleading or unsubstantiated. Consumers often don’t trust marketers’ claims of “green.” Print service providers can offer third-party audit endorsements through Chain of Custody FSC certification. Service providers can assist direct marketers with other critical environmental information. Cihosky notes that only
1% of Corporate Canada understands environmental regulations.
Another critical ramification is for direct marketers to be sure their lists are clean and correct. And, give consumers more control over what they receive by targeting mail only to individuals that will be most interested. Consumers are frustrated when mail is seen as wasteful. What is considered waste is direct mail that is poorly targeted with information that is not relevant, mail that is addressed to the previous owner or tenant or multiple pieces of the same mailing.
Though U.S.-based, Victoria’s Secret is a high-profile example of environmental action, the company was mailing one million catalogues daily, so it was certainly a major target for worldwide concern. At the time the company was identified for environmental transgression by advocacy groups, the paper for their catalogues came from boreal forest trees. As a result of the adverse attention, the catalogues are now printed on paper with a high recycled content that also qualifies as FSC certified. Victoria’s Secret is now an environmental leader.
Data hygiene – a golden opportunity
Statistics show that 15%-20% of Canadians move each year. Canada Post receives 1.1 million change of address requests annually – which translates to an estimated 65% of movers. If 35% of movers don’t inform Canada Post of their whereabouts are they informing the originators of their mail? Technology offers tools to determine address accuracy and to make address corrections. How many direct marketers use them and with what frequency? Data hygiene, says Cihosky, is an immediate golden opportunity. Is this a service print providers can offer to their clients? Canada Post studies show a considerable bottom-line impact.
What’s good for the environment is good for the bottom line
Canada Post has been identifying environmental issues that impact the mail industry. A research paper titled “The New Environmentalism” and tools to measure the impact direct mail has on the environment are available through www.canadapost.ca/green. Service providers can offer direct marketers the tools to refine and manage their lists, as well as other elements that deliver an environmentally-conscious product. Relevant content that also identifies an environmental benefit statement, delivered to a well-targeted list quickly demonstrates an increased return.
Recessionary economy retrains marketers
Cihosky describes our present economy as a “big elephant.” During times like these, money should be spent judiciously on what is manageable, measurable and accountable. Direct Mail can deliver all three. The volume of direct mail has tanked – for better and for worse. October 2008 was the tipping point for the marketing industry. Consider, says Cihosky, five strategies for marketing in a recession:
1. Keep your customers – existing customers are your best asset
2. Monitor your return on marketing spend – understand what media allows you to measure success
3. Invest wisely – identify your most qualified audience to deliver your message to a smaller group more frequently
4. Focus on a value proposition
5. Be compelling and relevant
According to Canada Post, Canadians welcome mail. It creates less pressure than other forms of media – it can be dealt with in the readers’ own time. Studies have shown that the rate of recall is high. Canada Post Marketing Research also shows that Canadians feel their personal information is at lowest risk when contained in advertising by mail versus telemarketing and email.
The average Canadian household gets 28.1 pieces of Direct Mail per week.
• 2.1 pieces addressed Admail
• 5.5 pieces unaddressed Admail
• 20.5 unaddressed print advertising
There is plenty of room for more.