Direct mail volume fell significantly during the last five years, and response rates decreased for many firms, according to a Direct Marketing Association study on the state of the list industry.
The DMA reported that 43% of all direct mailers boosted their mail volume in 2001, 37% remained stable and 21% reported a decline compared with the prior year.
This marks a major change from 1997, when approximately 70% of all mailers reported increased postal mail volume.
In addition, 68% indicated greater use of e-mail. Those sending more e-mail were less likely to see a hike in postal mail volume.
However, companies with greater e-mail volume — some 500,000 and above — were most likely to increase their postal mail. Sixty percent of those surveyed attributed the higher volume of e-mail to its lower cost.
Mailers also reported a falloff in response over the last five years.
Response rates remained the same for 53%. But 25% noted an increase and 21% a decrease. In contrast, 37% indicated higher response in 1997, 34% saw no change and 19% experienced a dropoff.
On the e-mail side, 35% saw heightened response in 2001, 59% had no change and 6% experienced a decrease.
Meanwhile, 40% reported higher postal mailing frequency, while 43% reported stable levels and 16% a decrease. This trend mirrors 1997 postal mailing results. In comparison, 69% of those sending e-mails raised frequency, 30% remained stable and 2% saw a decline.
Respondents who send more e-mail were less likely to raise their postal mailing frequency. Those sending less postal mail were more likely to boost the frequency of e-mail.
More than 60% of survey respondents mailed their house files at the same rate they did in 2000. For postal mailings, only 30% increased the use of house files compared with 52% in 1997.
E-mail results were similar, with 63% indicating that the use of house file names was stable, 27% noting an uptick and 10% reporting decreased usage.
Less than a third of all postal mailers noted brisk use of outside lists while some 60% indicated no change from 2000.
In 1997, 53% of the survey respondents used more outside lists than they had previously. Some 67% of e-mailers said their use of outside lists was unchanged.
Respondents used the following techniques to improve response: priority mail history analysis (93%); mailing to the house file (93%); hotline mailing (91%); remailing to multibuyers (90%); and NCOA (90%).
E-mailers relied on personalization (63%); demographic segmentation (53%); outside lists (49%); geographic segmentation (48%); and prior mail history analysis (46%).
Nearly two-thirds of the mailers surveyed do not rent or exchange their customer files, a trend that reverses as the mail volume climbs.
Some 57% of companies with mail volume of over 30 million pieces offer their lists for rent or exchange. Only about 1% of e-mailers rent their names. List rental income decreased for 24%, increased for 31% and remained stable for 46%. E-mail rental income was stable for 83% and declined for 3%.
To maintain their marketing databases, respondents with the heaviest postal mail volume invested the most. Forty-one percent with mail volumes over 30 million spent $500,000 to $1 million, whereas 48% with volume under 3 million spent less than $50,000.
But the respondents are optimistic about 2002. More than two-thirds project significantly or marginally better business conditions when compared with 2001.
The DMA State of the List Industry Report was conducted on behalf of the DMA List/Database Council. In January, e-mails were sent to about 2,000 DMA voting members who mail or e-mail to both consumers and businesses. Follow-up e-mails were sent in February and March, resulting in a 19.3% response.
The complete study will be released at the end of September and will be available through the DMA.
WEAKENING VITAL SIGNS
- Less than a third of postal mailers are stepping up outside name usage, compared with 53% in 1997.
- Only 25% said response rates had improved, vs. 37% in 1997.
- House file use is flat, with 30% reporting an increase compared with 52% five years ago.
Survey Finds Alternative Media on the Upswing
More money is being allocated to alternative media as marketers look for less expensive ways to reach customers and prospects, notes the Direct Marketing Association's recently released State of the List Industry Report.
Companies with large postal mail volume — between 3 million and 20 million pieces — were 38% likelier to direct more dollars to alternative media. Firms that mailed 11 million to 20 million pieces were 40% more inclined to report a hike.
Overall, about six in 10 respondents indicated they maintained a stable alternative media budget.
Not surprisingly, companies doing a greater e-mail volume (more than 1 million) were most likely to budget more resources for alternative media. Forty-six percent cited an increase.
Segmentation techniques were used by companies to buy alternative media: 47% for package inserts, 35% for freestanding inserts and 33% when mailing statement stuffers.
To track response other than by the number of orders placed, respondents measured the media's effectiveness through referrals (46%) and inquiry conversion (41%).
— Patricia Odell
