Someone Blogged about Direct Mail *Gasp*

“It just makes cents to save a few bucks.” A quick Google search tells me no one has said this before, but I find it hard to believe a pun this good has been passed up. Anyway, you don’t have to get an A in accounting to know that the two ways to increase your profit is either sell more, or spend less while generating the same revenue. It’s important to spend your sales and marketing money wisely to get the best return on your investment. Despite what you may have heard from social media or electronic marketers telling you that direct mail has little value, getting something in the mail is still a great way to reach prospects or introduce existing customers to new services. Or, if you are Delta Airlines and American Express, introduce current customers to services they already have.

Yes, I said that correctly.

It seems that about every six weeks, I get a really shiny fancy-pants offer in the mail co-signed by bigwig marketers from Delta and Amex about all the benefits of signing up for the Delta SkyMiles American Express card. It’s a great offer, provides plenty of features, and, as Rick Vaughn in Major League says, “it keeps us from getting shut out at our favorite hotels and restaurant-type places.” I’d be all for getting this card, except I already have one. It’s been nearly two years since the wife signed us up and we use the card religiously at all of those restaurant-type places.

But Joel, why don’t you just drop it in the recycling bin and be quiet about it? Because direct mail can be expensive and sending out pieces to people who already have your product doesn’t make good business sense.

For argument’s sake, let’s say that between design, printing, materials, labor, and postage that it costs about one dollar to mail each piece (maybe that’s a little high or low, but it makes the math easier). If they send out 250,000 pieces, and even if 5% are people who already have the card, they’re wasting $12,500 per mailing. If they mail eight times a year their marketing departments are spending $100,000 to reach customers that already have their product. Maybe the lifetime value of an American Express customer more than makes up for those marketing losses, but I’m guessing no company gets to that level of success by wasting $100,000 annually without trying to fix the problem.

Since my wife doesn’t get the same offers, my guess is that American Express and Delta match two files. One is the universe of people with SkyMiles numbers and the other is a file of SkyMiles numbers that are associated with an Amex card. Any records that don’t match and reach a credit score threshold get a mailer. However, this process fails to recognize joint-card accounts like my wife and I enjoy. Given the annual fee associated with this card, I’m assuming that many households similarly have joint cardholders. Given this fact, it would probably be much more effective for them to do their matching at the address level rather than at the name or SkyMiles level, which they are presently doing. Soliciting present joint-account holders is very unlikely to lead to new customers.

As with many examples, it’s easy to shrug off the “big company problem.” But if you are a small non-profit and have a correspondingly small marketing budget, you probably don’t want to waste a penny of your marketing dollars sending multiple mailers to one household. There are many ways to look at your customer list and determine the most effective way to reach the people you want, and it’s significantly cheaper to scrub your list for duplicates than it is to send them mail.

Now if you’ll excuse me, I’ve gotta go call a guy about trademarking that “cents” intro.

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