Put yourself in the position of a publishing or marketing executive for one moment. Your company needs to get the word out about its products and services, needs some means to receive customer responses, and also must deliver goods into the hands of the consumer. The broad range of media with which initial consumer contact can be made is overwhelming, as is the number of options for consumer follow-up, order acceptance, and delivery. How do you co-ordinate what could easily become a logistical mess? You turn to a mailing and fulfillment service, of course.
Mailing and fulfillment services can be stand-alone businesses with or without in-house printing capabilities. They work with publishers and marketers across all industries to distribute printed products. Fulfillment operations go further than simply mailing, and can include on-demand printing of customer catalogs and product information, as well as warehousing of the catalogs, information, and even the products themselves. The field requires expertise in postal and shipping regulations—often including import and export requirements—as well as the willingness to work closely with customers and in accordance with their stringent time limits.
Direct Mail
Direct mail advertising is a key segment of the mailing and fulfillment industry, and remains one of the most effective ways to reach both local consumers and those located across the globe. It’s a big business. The Canadian Marketing Association’s 2007 study, “Marketing’s Contribution to the Canadian Economy”, noted that direct mail activities resulted in sales of more than $20 billion, and that more than 140,000 Canadians are employed in some capacity in the direct mail industry.
In addition, based on research among its members last year, the CMA stated in November that it expects advertising in Canada to grow at a compound annual rate of 5.3% per year through 2011, with the greatest growth in the television, direct mail, and out-of-home sectors. However, CMA also predicts that the digital media sector will see the greatest growth in terms of adding jobs, and also that Canadian marketers will spend more than $3.3 billion on digital media by 2011, more than doubling their digital media expenditures of 2007.
While “new media” digital marketing appears to be encroaching on established business communications media, direct mail still has the distinct advantage of being perceived as less intrusive than telemarketing and even unsolicited e-mail advertising. According to a 2005 survey conducted by Canada Post:
- About 65% of Canadians spend some time during the day reading unaddressed advertising material.
- Canadians say they are most likely to respond to product samples, coupons, and promotional items.
- 68% said they are likely to respond to flyers.
- 67% of Canadians would rather receive unsolicited mail than unsolicited e-mai.
- 63% read the mail as soon as they receive it, including advertising material, with 28% reading it later in the day.
Producing a direct mail campaign often conjures the image of high-volume web presses churning out millions of inserts or catalogs, but it’s an outreach technique that can be done on a smaller scale with the right mix of expertise and capabilities. Micro Mailing Canada, located in Scarborough, Ontario, is a small, family-owned company that has been providing mailing services for ten years to clients across several industries. Mini Burman, company president, and Ajay Burman, general manager, along with other employees, offer addressed admail, publications mail, dimensional admail, and lettermail processing services, as well as personalized data merge production and mailing, fulfillment, and polybagging.
Ajay Burman describes the company’s specialty as its data merge services. These combine client communications and messaging with the client’s mailing list to produce materials that are personalized and addressed to each individual customer. Data merged documents can range from sales letters to short-run black and white laser-printed postcards in volumes of 5,000 to 10,000. Micro Mailing can help its clients design and produce mailing pieces to meet Canada Post’s requirements for postal discounts for presorted and volume mailings.
Micro Mailing also assists customers in locating appropriate lists for targeted marketing projects—though to avoid conflicts of interest, the company doesn’t compile the lists—and keeps customer mailing lists up-to-date for timely delivery. Such record keeping can be quite complex, given the different classifications of mail and the specific requirements for each. Canada Post classifications relevant to most direct marketers include Unaddressed Admail, which offers the lowest postal rates; Addressed Admail, sent to targeted destinations in Canada; Dimensional Admail, defined as mailing pieces for three-dimensional packages; Lettermail, for items such as invoices and reports; and Incentive Lettermail for volumes of 1,000 pieces or more (which can qualify for discounted postal rates). In addition, mailing lists for Letter Carrier Presort (LCP) mail must be sorted and ordered per “postal walk,” which is the actual route taken by the mail carrier. LCP mail also must be processed and periodically reviewed to eliminate outdated names and addresses and update address changes based upon COAN (Change of Address Notice) data. Failing to maintain a 95% accuracy in one’s mailing list can result in penalties.
Canada Post has not only established the various classifications of mail and the specific requirements of each, but also has been assertive in providing support to small businesses in conducting their own direct mail programs—sometimes taking these potential jobs away from privately-owned mailing companies. Yet despite their sometime competitive conflict with private mailing companies, Canada Post clearly has a stake in supporting the growth of the direct mail industry. In 2005, admail accounted for about 20% of Canada Post’s revenues, and this number increased by 14.4% in 2006. The organization’s promotion of direct mail as an advertising medium may help to drive more Canadian businesses to commercial lettershops like Micro Mailing to get the work done on schedule and right the first time.
Burman remains optimistic about the future of his company, and even views digital media as a source of new business for Micro Mailing. “The internet has opened up avenues for people doing more from a single station. It can generate more business and more printing and direct mail opportunities,” he said. “We see ourselves growing conservatively, but still growing, over the next three years.”
Picking and Packing
The basic purpose of direct mail—or any kind of direct marketing—is to spark some kind of response from the customer. Fulfillment encompasses all of the operations that support that response and can cover a wide range of capabilities. Based out of a 26,000-square-foot production and warehouse facility in Mississauga, Ontario, Interlinc Direct Corp. offers integrated direct marketing capabilities that include fully automated lettershop processing for direct mail sent to Canada and the U.S., as well as order-taking through Internet data portals designed to match the client’s corporate brand, 800-number telephone response and order-taking, and warehousing and fulfillment of printed materials and other types of products.
“We do a lot of direct mail and mailing for a lot of publications and books,” says Neil Raven, president of Interlinc Direct. “We work through multiple channels, which is basically vertical marketing tied into TV and radio and telemarketing. But the only aspect we handle is response. We don’t get into the strategic planning end of it or offer mailing lists, though we will do data manipulation.”
Interlinc Direct works with clients in the pharmaceuticals, automotive, financial, food, and beverage industries, and with franchisers. The 19-year-old company has in-house web and offset printing capabilities, as well as high-speed laser printing for variable imaging. They print outgoing direct mail as well as orders for printed materials. They also pick and pack orders and provide kit assembly at their extensive warehouse.
For outgoing direct mail, Interlinc Direct provides a full range of services, including high-speed ink jet printing, labeling, postal indicia printing and stickering, automatic and “intelligent” insertion, shrinkwrapping, and polybagging. At the fulfillment end of the business, Interlinc Direct accepts orders for clients, and can accept credit card payments online with their full e-commerce capabilities. They also provide inventory reporting to keep clients up-to-date and to ensure that there is enough product on hand to fulfill orders.
“Typically what we handle are orders from our clients’ specific membership groups,” Raven said. “As far as printing goes, we actually produce a lot of the materials we send out. Many of the products we ship are pharmaceutical products.”
One service Interlinc Direct prides itself on is its ability to handle “special events” for clients, or specific and carefully-timed promotional campaigns. The company will provide telephone support for customer response—including a toll-free 800 number—and, for mail-in campaigns, will accept, open, and sort responses, reporting all results back to clients in customized printed or electronic formats.
Looking ahead, Raven noted, “People are going to see more print-on-demand versus warehousing large amounts of inventory. This can minimize the products that need to be warehoused and the cost of that, but the technology for it is still expensive. The cost-savings still are not quite there yet, but when the costs come down, we’ll expect to be seeing this service more widely available.”
Do not call
At the end of September, 2008, the Do Not Call registry, managed by Bell Canada, is expected to become operational, bringing with it fines of as high as $15,000 for violations. This registry could have a positive impact on direct mail, driving advertisers to redirect their budget dollars from telemarketing to mailing. However, while direct mailers may stand to gain somewhat from the list, they aren’t expecting a big boost.
For one thing, the Canadian Marketing Association (CMA) has already been providing a self-regulating “Do Not Contact” service, accepting requests from consumers who do not wish to be telephoned or receive unsolicited admail or faxes. CMA’s membership may already have purged the names and addresses of uninterested consumers from their lists. In addition, since 1997, Canada Post has acknowledged requests from mail recipients who do not wish to receive unaddressed admail, the type of commercial mail sent to “occupant.”
The more broadly-based Bell Canada program may generate a new wave of phone privacy requests, but Do Not Call doesn’t apply to all organizations. Charities are exempt from Do Not Call regulations, as are political parties, public opinion pollsters, and general-circulation newspapers. Businesses that have an existing relationship with a consumer will be allowed to continue to contact the consumer by telephone. In addition, Do Not Call restrictions have no impact whatsoever on consumers initiating communications—for example, calling an 800-number to place an order for a product or service advertised in a flyer or on TV—and these are the types of calls taken by fulfillment centres. According to its 2007 study, CMA projected that telemarketing sales will actually increase by 2011, despite Do Not Call regulations.
The expected expansion of the use of digital media—e-mail blasts and other types of internet-based solicitations—would seem to pose the greatest threat to the direct mail industry. Thought it has often had the opposite effect, by compelling consumers to request more information, such as catalogs or other kinds of product literature. In addition, the growing area of “data mining”—gathering information about prospects through their website travels—can help to develop and fine-tune highly targeted mailing lists for personalized one-to-one marketing communications. Some commercial websites now allow consumers—or branch offices of a larger corporation—to pick and choose the items that interest them and order their own customized catalog including only certain types of items.
Despite competition, direct mail and fulfillment will likely continue to grow as mailing and fulfillment houses incorporate new technologies that increase operating efficiencies and improve profitability, and even small businesses may find that direct mail is an effective means of reaching and serving customers.