Direct Mail Rebounds
Direct mail has been the mainstay marketing solution for many businesses for decades, but it has faced more than its share of challenges in the past few years. The expanding use of online marketing, rising postage costs and dramatic cutbacks that direct mail’s biggest industries (including finance, insurance and automotive) had to make in the wake of the recession, have led some to predict that direct mail is on its last legs.
But, despite these troubles, direct mail shows signs of resilience. In its latest Quarterly Business Review the Direct Marketing Association predicted that after spending on direct mail dropped 16% in 2009, to $44.4 billion, it would steadily rise over the next few years – rising 2.5% in 2010 alone. “Direct mail is not disappearing by any stretch of the imagination,” says Yoram Wurmser, research manager at the Direct Marketing Association. He believes the category will continue to see sales growth for the foreseeable future. “In the past you had direct mail as broadcast mail. What you are going to see now is more targeted mail, more personalized and more of a conversation.”
Direct mail today is more personal than ever before. Marketing directors are making use of the information they already have on their customer base, and using today's digital printing technologies to send custom printed pieces that have a higher impact because they are more relevant to the recipient.
Decoding Customer Engagement
One of the advantages unique to direct mail is that it gets something into the recipient’s hands, encouraging them to take action. The leadership at American Car Care Centers (ACCC) had this in mind when they ran a campaign to help drive donations for their charity partner, the Children’s Miracle Network, while also boosting foot traffic to their 1,000 stores nationwide. As an exclusive partner of Children’s Miracle Network, ACCC sells “miracle balloons” at its retail sales counters. The company offers customers the branded balloon for a $1 donation, and the donation form includes a customizable bottom portion where partners can include coupons or special offers to help drive sales and traffic in the store.
Instead of attaching coupons to this area, ACCC printed coded messages; 95% of the messages offered $10 off of any item in the store, but the other 5% awarded big ticket prizes like free iPods and LCD televisions.
This is where direct mail came in. ACCC sent out “decoders” (a special red cellophane lens die cut into the shape of a balloon) to nearly 300,000 individuals. Recipients could bring the decoder into a store and run it over the special coupon on the donation form. The promise of prizes and curiosity of the consumers drove heavy traffic into the stores, raising $250,000 for the Children’s Miracle Network in less than three months. “In a tire retail environment, it’s very difficult to get new foot traffic that you wouldn’t otherwise organically get – people don’t just come browse tires,” says Jeremy Lewin, director of marketing for ACCC, who developed the campaign. “Ultimately, if you take the increase of foot traffic and multiply it by the rate at which a new customer buys something, we had some significant ROI.”
Here we have a perfect example of a marketing campaign with multiple motivators. Customers are drawn by the opportunity to win a prize, as well as their interest in helping out a worthwhile charity. In the end, everybody wins! It's called Cause Marketing, and it can work for you, too. We ran a feature on it last month. In case you missed it, you'll find it here.
FTC To Regulate Greenwashing
We're glad to hear this news. As “green” has evolved to mean so much more than a color, a majority of consumers and businesses have taken an interest in environmental responsibility. Everywhere you look, there are examples of marketing with an eco-friendly focus. Unfortunately, this has also led to exaggerated claims and downright distortion.
In an effort to protect consumers from exaggerated advertising claims, the Federal Trade Commission (FTC) is considering tight regulations on how marketers use words like “recyclable,” “biodegradable” and “carbon neutral.” The rules, also known as Green Guides, could affect more than 300 environmental seals of approval on current products, possibly making those environmentally-friendly claims in violation of government standards. Besides updating those standards, the rules would also more clearly define how companies can back up their claims of environmental sustainability.
The updated regulations will continue a recent trend of more aggressive enforcement of eco-friendly-related advertising. During the past two years, the FTC has brought seven environmental advertising enforcement actions, compared to zero during the prior eight years. While the FTC cannot compel companies into adopting more eco-conscious policies, the agency is permitted by law to stop marketing fraud.
The FTC is specifically targeting greenwashing, the practice of making an unsubstantiated or misleading claim about the environmental benefits of a product in order to increase its sales. The most notable case of alleged greenwashing occurred last year when the FTC accused Kmart of listing paper plates as biodegradable. The plates, the government argued, would not typically decompose in solid waste facilities where most garbage is found. Kmart eventually agreed to alter its “biodegradable” claims in its marketing.
Before the FTC begins enforcing the new rules, the agency will first publish the Green Guides in the Federal Register and institute a comment period. The FTC is expected to announce the updated regulations in September 2010, likely issuing the most substantial change to Green Guides in more than a decade.
Government regulators can't catch every violator, nor should they. It's up to every consumer to give a little thought and ask questions before buying. Remember the three stages: reduce, re-use, recycle. If a re-usable grocery bag replaces hundreds of disposable ones, that's certainly a good thing. But consider that some of those bags are not actually made from recycled materials. That sounds like a missed opportunity. To make sure you're not missing any opportunities, give us a call.