Effectiveness of Email and Direct Marketing |The Importance of Integrated Marketing Campaigns

Last week I shared a list I had compiled for an internal e-learning course and this week I wanted to share a fascinating piece of research.

I was asked whether email marketing was more effective than direct mail, and by what margin.

Based on some really cool work my colleagues and I have been doing with a client’s email communications, that I hope to go into more detail on later, I was hopeful that the ability to personalize, and measure, the email experience would lead to it being more effective.

The results were surprising.

First off, both email and direct mail marketing are really dependent on the content within the piece, the industry/sector the sender is in and, to a large extent, the relationship with the recipient. For these reasons, it’s very tough to definitively say “this is the benchmark to which you should aspire”. More accurately, we should look to gather as much data as possible, look to prove the ROI of your campaigns and look for increasing metrics over time.

That being said:

Direct Mail

The standard response rate for the first piece of direct mail sent to a recipient is about two per cent but a marketer could consider any where between one and three per cent as a “good” response.

Bearing in mind that a response to a piece of direct mail is a complex action – the recipient must open the piece, read the piece and then take action on it – two per cent sounds like a pretty good response rate..

However, this two per cent response jumps to between five and 35 per cent when the direct mail has been sent to a recipient for a second time (as a renewal).

Email

Measuring the effectiveness of email is much easier. We can track open rate and click-through rate extremely easily and, what’s more, we can use this historic data to tailor the content by the user’s interaction. So just by using the content, by clicking through on links I find interesting, the content get’s smarter and more personalized to my interest.

For a vanilla email, sent to an opt-in (as opposed to bought) email list, marketers can report an open rate of between 20 and 40 per cent combined with a six per cent click-through rate as average. Anywhere above that and you’ll be doing well.

See the graph below for more detailed benchmarks for your industry.

clip_image002

Because you can effectively and cheaply segment your email database by its past actions and by self-declared preferences (upon sign-up), smart email marketers can significantly increase both of those metrics.

However, you can only improve on what you measure so it was worry to find out that 18.7 per cent of email marketers, in a 2006 survey, didn’t know their open rates…

Conclusion

So, as expected, email marketing would seem to give the direct marketer much better ROI and much better metrics. However…

According to one article I found, both email and direct mail marketing tactics work better for non-profits (where better = raise more money) when used in tandem.

Interesting. In presentations and brainstorms, we always talk about the need for truly integrated communication plans where the online and offline components of a campaign truly tessellate. I’m glad to see that the quantitative, as well as anecdotal, evidence supports what I’m sure all marketers already suspected – no one tactic can reach all of your audiences.

 

12 Responses to Effectiveness of Email and Direct Marketing |The Importance of Integrated Marketing Campaigns

  1. Sue says:

    And don’t you think that ‘truly integrated communication plans’ these days should also include social media marketing? Eclipse Marketing’s blog talks about this and how slow the UK auto industry is being at making use of social media techniques.

  2. Ed Lee says:

    Thanks for the comment Sue – as an online communications consultant, and blogger, i think you should be wary of putting the tactics before the strategy or the strategy before the audience segmentation. Social media is a powerful communications tool for all marketers and communicators but it’s not necessarily the right approach for every audience.

    So I guess my answer to your question is the very unsatisfying “it depends”. it depends on the audience, on the campaign goals, on the client organization, on a lot of things.

    social media is important, and getting more so, but being tactic-neutral is always going to be paramount.

    Ed

    ps – way to pimp your blog!

  3. Mish says:

    I would be interested in seeing metrics re: integrated campaigns. The way I see it, it can go either way. The person can be sick of seeing the message in the marketplace and NOT open the email or, it may be the deciding factor to act on the message.

  4. Nancy Arter says:

    Very interesting . . . and once again proves that tracking and measurement is so very important. Particularly now, as direct marketing channels expand (to Sue’s point, you’ve got to consider social media, too), you’ve got to determine customer preference, market to that preference, then track your success in each channel. Well done — and I can’t wait to see your future results of your really cool work presented here.

  5. My experience with direct mail and email to getting responses, generating qualified leads that result in sales relies on four major components.

    1. Your offer.
    2. It’s relevancy to the target
    3. The timing of the offer
    4. The “step” your asking your prospect to keep in mind.

    Any time a client has put together a great offer, timed it well with the prospect’s needs, and picked the right target, the results are good. Unfortunately, many try half-hearted sales promotions, offer up nothing new, and the responses are dismal, leaving the marketer frustrated, believing direct marketing does not work.

    And marketers that are completely driven by stats are like people that run businesses completely by numbers. They miss most of the forest hunting for a few trees. While I think paying attention to some vital stats is important, I’ve known many, many marketers that get bogged down with analysis paralysis. And that’s no good for a brand either. Everything you do does not have to have a return. It’s tantamount to taking a woman on a few dates, and being disappointed because you’ve spent a few hundred dollars, and she won’t marry you yet…LOL Like I said, when the offer is right, at the right time in her life, and you’ve done the right things, and those things are relevant in her life, she’ll come around…

    Nice blog.

  6. What do you mean by “open”? I’m wondering if you can really equivocate an email “open rate” to the direct mail “response rate”.

  7. […] campaign. But which medium offers the best results? Internet communications specialist Ed Lee does a side-by-side comparison of direct mail vs. e-mail and says the results will […]

  8. josedsnobre says:

    favorited this one, guy

  9. Chris says:

    Ed,

    What is your source for your Direct Mail statistics mentioned in the above post? Specifically, I am interested in the source for the stat on how response rates jumped to 5-35% if the message is sent a second time. Or is this from your own experiences?

  10. Marty Thomas says:

    Another good way to give your response rates a boost is to use personal urls. An example of a Personal URL would be: yoursite.com/Jim.Smith and when “Jim” visits his personal url, the website will usually be customized to him. Personal URLs used to be difficult and expensive, but I recently created an application that is not only affordable, but extremely easy to use. You can check it out at: http://purlem.com.

  11. […] 2010-01-08T04:57:13  Effectiveness of Email and Direct Marketing |The Importance of Integrated Marketing Campaigns [link to post] […]

  12. digital brand engagement…

    […]Effectiveness of Email and Direct Marketing |The Importance of Integrated Marketing Campaigns « Ed Lee's Blogging Me Blogging You | @edlee[…]…

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