The Future of Direct Response Marketing
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The earliest surviving piece of mail can be dated back to 255 BC.1 This single fact proves that for over 2000 years, written mail has been a crucial means of communication – especially as a way to evoke a direct response. Mail has evolved quite a bit over the course of history, but with the recent “tech boom” and digital explosion, the future of direct response advertising is evolving.

For Starters – Direct Mail is Here to Stay

Per the latest demographic research, there are over 125 million households in the United States.2 This certainly provides plenty of opportunity for reaching your audience through direct mail.

Acquiring prospects via direct mail is extremely cost-effective and the average cost-per-acquisition is extremely competitive compared to other marketing channels – $19 for direct mail vs. $21-50 for paid search or display. Additionally, the average response rate for a direct mail prospect list is 1.0%, compared to 0.62% from digital channels.3

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Although a recent study from the Direct Marketing Association reported difficulty tracking the effectiveness of direct mail, a sound strategy can alleviate this concern. By exercising the capability of leveraging modern technology, as well as personalized human interaction, advertisers can “connect-the-dots” on their direct response efforts.

Where is Direct Response Marketing Headed?

The first email was sent in 1971 by computer engineer Ray Tomlinson.4 Less than 40 years later, Google reported that there are over a billion active monthly users on Gmail (Google mail). As the modern era continues to evolve into a digital-first environment, we can speculate that additional growth in email traffic should be expected.

It is estimated that over one-third of the worldwide population will be using email by 2020, nearly 2.9 billion users and 5.2 billion accounts.Considering similar trends in smartphone usage, we can anticipate that many of these email users will be accessing their messages on mobile devices.  Additionally, 66% of online consumers check their email multiple times per day, with 13% checking at least hourly, or even more frequently.6

Direct response marketing is more important now than ever.  Considering the effectiveness of direct mail advertising, coupled with the steady growth of email users, it’s crucial for advertisers to leverage their direct response marketing and advertising efforts. Recent trends suggest that advertisers are reducing their direct mail budgets and shifting their budgets elsewhere, however, even though the overall dollar totals have dropped, the marketing budgets (for auto dealerships) have risen.

How to Win with Direct Response Marketing & Advertising

Historically, direct mail has been, and will continue to be, a winning play. But with all the latest trends and technology that are shifting consumers’ mentalities towards a digital approach, how can businesses adjust to maximize their efforts?

For starters, making sure you have clean data. Clean data may refer to customer mailing addresses, email addresses, phone numbers, etc. Basically, any sort of contact information that a business may have on file that can be used to reach a customer or prospect. The key to any successful marketing or advertising initiative boils down to reaching the right customer, at the right time, with the right message. How can this be accomplished if you do not have the proper data? Ensuring that you have up-to-date contact information is crucial in this process. Mitch Barns, the CEO of Nielsen, summated this issue very concisely: “The right data, in the right form, handled in the right manner. This is what will drive the coming advertising renaissance.”7

So, let’s assume you have clean data, now what? As we hit on above, the first step is reaching the right customer. We have a list of the customers that we need to reach, but what is most effective method for doing so? We have a couple primary options: utilizing the traditional direct mail approach, or the ever-evolving online approach. Let’s look at some of the new capabilities available via digital advertising.

Customer Match and Custom Audiences

Traditional email marketing is straightforward – you compile a list of your customers or prospects, create your messaging, and then send out your email to the list. This method has proven to be effective, but very limiting. For your message to be effective, consumers must:

  1. Have an active internet connection.
  2. Open their email platform.
  3. Click on your email.
  4. Complete the intended call-to-action.

Email marketing is very cost-effective, but how can you reach customers who may not be actively reading their emails? One solution involves leveraging the power of Google’s customer email match.

In a previous article we discussed the incredible power of Google’s Gmail ads. One capability that makes Gmail advertising so attractive is the ability to incorporate customer email-matched audiences. Basically, you can take a list of email addresses, upload them into Google AdWords, and within 24 hours, Google will match that list against customers who also have a Google Mail (Gmail) account. Typically, match rates range between 35% – 70% of a list, largely dependent upon how many Gmail email addresses were in the original uploaded lists. Google customer lists can be used to target customers across Gmail and YouTube. They can even be used for paid search advertising.

In the same way, you can use a customer list to serve advertisements to custom audiences. This allows you to target a custom audience from your customer database with personalized advertisements about your dealership or offers. Facebook and Google (Gmail) allow dealerships to create these custom audiences from their database. This form of direct marketing will only expand, but for now this is a great addition to your current direct marketing strategies.

Because these options are possible in today’s world, it’s important that they’re utilized! They work to boost the power of traditional methods. They can be implemented with direct mail in order to further move your customers through the buyer’s journey and into your dealership. By incorporating today’s techniques with traditional direct mail, your direct marketing campaign will be more successful and achieve a higher response rate – which leads to a higher return on investment. The higher your response-rate, the more traffic you’ll see in your showroom. By focusing on direct marketing with this type of omni-channel approach, you’ll reach your target audience with information that’s prevalent to them – which will result in more selling for you and your sales team. The future of direct marketing is being implemented now and the tools we use will only continue to expand and develop. Direct mail has been around for many years and it doesn’t appear to be dwindling, but combined with today’s more “futuristic” methods, success rates are skyrocketing. We can’t wait to see what will be possible in the world of direct marketing as the years progress.

Easy Steps to Improve Digital Ads
Easy Steps to Improve Digital Ads
  1. http://www.upu.int/en/the-upu/history/about-history.html
  2. https://www.statista.com/statistics/183635/number-of-households-in-the-us/
  3. https://www.iwco.com/blog/2015/04/14/dma-response-rate-report-and-direct-mail/
  4. http://www.computinghistory.org.uk/det/6116/first-e-mail-sent-by-ray-tomlinson/
  5. http://www.radicati.com/wp/wp-content/uploads/2015/02/Email-Statistics-Report-2015-2019-Executive-Summary.pdf
  6. http://www.emailjam.co.uk/blog/how-often-do-people-check-their-email/
  7. http://www.recode.net/2015/6/22/11563780/big-datas-big-impact-on-the-future-of-advertising
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