Direct Mail Marketing FAQs

Jeff Tarran
Direct Mail Marketing FAQs
Direct Mail FAQs

Welcome to our Direct Mail Marketing FAQ! Want to know more about direct mail? We’ve combined the most common questions to help you understand the unique benefits, best practices, and what to expect from your campaigns.

 What are some of the unique benefits of direct mail versus other channels?

Here are a few of the key benefits that direct mail provides to marketers:

  • Highest ROI of all marketing channels — Direct mail consistently delivers the highest ROI of any channel based on the ANA’s Response Rate Report.
  • Higher conversion rates and customer LTV — Direct mail customers are more engaged, so they are more likely to respond and become loyal customers.
  • Better data — A physical address is the most verifiable contact information available. Better data means better targeting, better modeling, and more attributable analysis.
  • Less clutter — We receive a few mailings each day versus thousands of invisible digital messages.
  • More engaging — Direct mail is the only physical, personalizable channel. 90% of recipients report handling their mail, and eye-hand interaction is far superior for engaging prospects than viewing content on a screen.
  • Trust — Scams, phishing, and fakes are almost non-existent in direct mail. According to consumer research, twice as many prospects prefer to receive mail versus email from a brand.

 What kind of response rates can different industries expect?

Direct mail stands out in the mailbox, often leading to higher engagement rates compared to digital marketing channels. Expect a response rate of 0.5% to 3% from a direct mail campaign. This range is typical for acquisition direct mail prospecting, but it’s important to note that results can vary based on factors such as targeting, offer, and creative design. Customer file mailings can have dramatically greater response rates and can play a significant role in retention, activation, cross-sell and upsell programs.

 How is direct mail’s address-based data different from digital data?

Direct mail relies on physical address data, which is the most verifiable and reliable contact data; far more so than digital data. Physical addresses change less frequently than email addresses or social media handles, and nearly every consumer has a primary physical address. Direct mail also benefits from high data accuracy standards enforced by postal regulations​​. It’s why government, financial, and health institutions depend on the mail for their most important communications.

 What industries are successful in the mail?

We have seen many industries succeed in the mail, both B2B and B2C. Top industries benefiting from mail programs include retail, financial services, healthcare, SaaS and business services. These sectors benefit from the tangible nature of mail, which can enhance trust and engagement with the audience​​​​.

 Does direct mail work targeting millennials?

Yes, direct mail can effectively target millennials. Studies show that 90% of millennials find direct mail to be reliable and prefer receiving promotional items via mail rather than email. They also tend to hold onto direct mail for a longer period, increasing the chances of engagement​​.

 What are the most typical direct mail formats?

Common direct mail formats include postcards, letters, brochures, catalogs, and self-mailers. Each format has its advantages depending on the campaign’s goal, whether it’s to inform, engage, or sell​​.

 Can you model customer databases to generate lookalike prospects?

Consumer and business address-based databases are ideal for modeling to create lookalike prospects. We use sophisticated modeling techniques and AI to analyze existing customer data, identify common traits, and use predictive modeling to target similar potential customers, increasing the likelihood of positive responses​.

 What is a typical test scenario for getting started in direct mail?

A typical test scenario involves A/B testing different elements such as offers, designs, and messaging. This can include testing different formats, personalization levels, and call-to-action strategies to determine what resonates best with the target audience​​.

 Give me some examples of the most important KPIs in direct mail?

The key metrics for gauging the success of your direct mail campaign include Response Rate (RR), Conversion Rate (CR), Cost to Acquire a Customer (CAC or CPA), Cost per Piece (CPP), Break-Even Point (BE), and Return on Investment (ROI). These metrics provide a comprehensive view of your campaign’s performance, enabling you to measure its effectiveness and financial viability, making direct mail a quantifiable and strategic choice for marketers.

 How do you know who responded to a direct mail package?

Direct mail’s address-based data set has a built-in advantage for accurately tracking attribution and response. A “matchback” analysis matches the mail file to new customers added during the campaign timeframe.Tracking mechanisms such as unique offer codes, personalized URLs (PURLs), and dedicated phone numbers can help identify who responded to a direct mail package. Where responders don’t provide their address, we can reverse append digital data to a physical address to perform the matchback analysis. Integrating response data with CRM systems ensures accurate tracking and analysis of responses​​.

 How much should a direct mail campaign cost?

When launching a direct mail pilot program, budgeting appropriately according to business size and goals is crucial.

  • For local mom-and-pop shops, a modest budget of $500 to $5,000 suffices, allowing these smaller businesses to engage with their community effectively through targeted postcards or flyers. This range helps assess the initial response without significant financial risk.
  • For small to medium-sized businesses, a budget of $50,000 to $150,000 is recommended. This allows for a broader reach and more varied mail formats, enhancing the ability to analyze campaign effectiveness across different demographics and regions.
  • Large to enterprise-level companies should aim for a budget between $250,000 and $500,000. This scale supports national campaigns with high-quality materials and advanced personalization, providing deep insights through extensive market segmentation and detailed response analysis, crucial for refining larger marketing strategies.

 How do you build a direct mail prospecting list?

There are literally tens of thousands of potential direct mail data sources for B2B and B2C prospecting. The direct mail data world is very dynamic with existing data updates and new sources all the time. If you have an existing database, modeling it for lookalike prospecting is a best practice. Here are just a few data source types to consider:

  • Your own in-house customer file
  • Compiled lists leaning heavily on demographic and publicly available data
  • Co-op transactional data
  • Service bureau financial data
  • Specialty lists based on interests and subscriptions
  • Business type and firmographic data
  • Lifestyle change data (new movers, just married, etc.)
  • Trigger data based on website visits or other actions suggesting purchase intent
  • Typically, you’ll want to test a mix of data sources to determine which will work best for your prospecting.

 How do you integrate a direct mail campaign into a digital campaign?

Integrating programs involves using consistent messaging across channels and leveraging online tools to enhance engagement during the campaign timeframe. Digital data can be appended to a mail file and the USPS offers Informed Delivery, a free service that adds a digital touch through email. Combining the strengths of multiple channels can improve overall campaign effectiveness​​.

 How long should it take to launch a direct mail campaign?

Launching your very first direct mail campaign could take 8-12 weeks. This timeline includes planning, design, printing, and mailing. Complex campaigns or those requiring additional data processing might take longer. As you become more familiar with the channel, timelines can shrink, especially as you start to automate your processes.

Can you compare direct mail response rates to digital?

Direct mail response rates are typically higher than many digital channels. For example, the average response rate for direct mail is around 4.9% for house lists, while email marketing often sees response rates below 1%. Prospecting response rates are typically much higher as well. However, the cost per acquisition for digital can be lower, making it essential to balance both approaches based on campaign goals​​.

How can direct mailings be personalized using variable data?

The direct mail industry has invested heavily in variable data printing, and the capabilities are now similar to digital. Personalization at scale, enabling marketers to customize direct mail pieces with recipient-specific information such as names, offers, and images, is common. This increases engagement and response rates by making the communication more relevant to each recipient​.

Will I see higher conversion rates with direct mail?

Yes, direct mail campaigns typically see conversion rates up to 20% higher than other marketing channels. The tactile, personal nature of direct mail contributes to this success, as recipients are more likely to notice and engage with physical mail. This makes direct mail an effective tool for driving actions and generating tangible results.

Is there a model to help me calculate direct mail ROI?

We have built one just for that purpose, check it out: Gundir ROI Calculator

Do I need an agency to help deploy a direct mail campaign?

While it’s possible to run a direct mail campaign on your own, working with an agency can greatly enhance your chances of success. Here’s why an agency can be valuable:

  • Expertise in Strategy and Testing: Agencies help develop a solid strategy tailored to your goals and target audience, designing and implementing testing programs to optimize your campaign and ensure high response rates.
  • List Sourcing and Targeting: Agencies have access to high-quality mailing lists and use advanced data analytics to refine targeting, increasing the relevance and impact of your mailings.
  • Creative Design and Production: Agencies specialize in creating compelling and effective mail pieces, managing the entire production process from printing to postage, ensuring compliance with postal regulations.
  • Navigating Postal Regulations: Agencies understand and comply with complex postal regulations, ensuring your mailings meet all requirements, avoiding delays or additional costs.
  • Performance Tracking and Analysis: Agencies provide detailed analytics and insights, measuring campaign success against KPIs, and adjusting strategies based on performance data to maximize ROI.
  • Using an agency can save you time, reduce the complexity of running a direct mail campaign, and help you achieve better results.

Ready to get started or improve your direct mail campaign?
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Jeff Tarran

Jeff has been with Gunderson Direct since 2017 and has played a significant role in the growth of the agency’s client base while helping to manage growth across agency departments.

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