Now May Be the Time to Launch a Postal Marketing Strategy

March 6, 2018 | Author: Travis Seaton

While ecommerce continues to grow and innovate, we have seen many pure-play digital programs start to reach maturity, which may not coincide with the growth requirements that investors and leaders expect. The next marketing dollar spent is not yielding the same return and takes twice as much expenditure to get the same overall result. Many ecommerce-reliant companies are beginning to hit the proverbial wall and are forced to look to other tactics for growth. This is where postal programs can potentially reinvigorate sales growth and drive incremental demand.

Those of us who have played in the postal space for long enough are well aware of the rule of halves, when it comes to a mature marketing strategy. So, for instance if postal circulation is increased 10%, then the corresponding overall response rate should decrease 5% and vice versa - a 10% decrease should result in a 5% increase in response. The beauty of this rule of thumb is that it can be applied to most variables and KPI’s across all disciplines. This is how we primarily build out our budget and plans, to estimate the impact of any change that we make.

This rule of halves applies to digital programs as well, and as companies start to hit maturity in their digital programs, they are quickly realizing that you can’t just throw more money at the same program and expect the same return. This rule works from the law of diminishing returns, which can be easily explained with a fishing analogy. It’s easy to catch a fish with every cast in the kiddie pool, but once you move to a lake it takes many more casts to catch that same fish.

This law of diminishing returns is one of the main reasons that some companies are suffering, as a result of creative redistribution of marketing dollars between programs and expecting the same return. This issue is for another day and another blog discussion, however.

 As companies approach that digital marketing saturation and find that they can no longer support the diminishing ROAS on increased spend, many have taken the leap into postal marketing to help contribute to the now expected exponential company growth. The reason that postal marketing is a viable marketing option, is that it is one of the very few “pusher” options whereas most digital programs are “catchers.” Read the article below by a former esteemed colleague of mine, Lorelle Carpenter, who wrote about this interesting subject.   www.cohereone.com/blog/blog-detail/drivers-and-catchers-as-different-as-apples-and-oranges-141

The beauty of postal marketing is that it offers the opportunity to increase engagement in your active files, re-engage lapsed customers, and opens up a new prospecting universe that previously may not have been identifiable. Through tried and true tactics, CohereOne is able to identify audiences that would have the highest probability to respond to postal contacts, therein increasing corporate demand and profits.  

You may have read up to this point and are thinking to yourself, “bah humbug” or “postal? we don’t need no stinkin’ postal.” Since your company is different or your customer is different and it is just a big waste of time and money. This may or may not be true, but here are some real life examples of companies we have helped launch postal programs this past year with tremendous success and many within their organization had the same reluctant opinion. 

Case Study #1
 
Lifestyle Accessories Company targeting Millennials and Gen X through ecommerce and brick and mortar retail.
  • Single mailing produced a 47% increase on incremental net demand
  • Extrapolated to rollout would yield $841,000 net demand increase

 

Case Study #2

Sportswear Company targeting specialty outdoor participants through ecommerce.
  • Buyer universe too small to conduct holdout – beat expectations by 10%
  • New prospecting universe that was previously unidentifiable

 

 

Case Study #3

Hard Goods Company targeting specialty outdoor enthusiasts through ecommerce.
  • Customers were contacted twice over two seasons
  • Postal strategy increased contribution by $138,000 and contribution per customer by $1.01

 

Case Study #4

Global Outdoor Company selling through ecommerce, brick and mortar and wholesale.
  • No holdout desired by management, assume 50% incremental for existing customers
  • New prospecting universe identified at a positive contribution
  • Overall catalog test yielded $835k incremental contribution

It is clear from the above case studies, that including a postal strategy has a very good chance of being successful when conducted correctly and can help companies start to avoid the diminishing returns in many digital marketing channels. I cannot stress enough the need to manage the launch carefully, as postal marketing is an expensive endeavor. When done efficiently and by applying best practices, it can be a very lucrative marketing option. CohereOne is exceptionally suited to help guide companies through this process to skew the odds of success.

If you have questions or would like to talk in more detail about postal strategies, contact me at TSeaton@cohereone.com