Alive and Well

In this multichannel age, direct mail is still the largest single power in direct marketing. The U.S. Postal Service handled 102.5 billion pieces of standard mail (direct mail advertising) in fiscal 2006, nearly half the year’s total mail volume.

Obviously, corporate mailers such as credit card firms and mail order catalogs are the largest part of this total, but thousands of smaller businesses and nonprofits are making sales, generating leads and asking for donations by mail.

Direct mail makes more sales than any other non-store medium, but the most successful marketers now support it with electronic media. Here we’ll look at three companies that achieved direct mail success before electronic media were available.

As a DMer you create your own markets. Unlike retailers that are influenced by weather, local events and recessions, you “own” your markets. You control the timing of every sale, and you can fine-tune efforts by analyzing customer data. To a great extent, the database you build by direct mail and Internet marketing is immune to competition from stores, ads and TV commercials.

Specialized products targeted at small markets do especially well. Many entrepreneurs start their businesses because they have one-of-a-kind items that aren’t available anywhere else.

THREE SUCCESS STORIES

The following summaries demonstrate the power of direct mail before e-mail and the Internet came along.

• Omaha Steaks (omahasteaks.com) doesn’t compete with other food mailers or retailers. Its customers buy because the company’s name and reputation are synonymous with quality food and superior service. From the beginning, it developed a special market for food products as gifts.

  The Omaha, NE-based firm started as a family mail order operation in 1952, when beef lovers asked to have steaks sent to their friends as gifts. The business was built entirely by direct mail for 13 years. In 1975 an inbound telephone center was added, and four years later the company established one of the first toll-free call centers with an 800 number. Today this DMer has 1.5 million customers.

• American Girl Dolls (americangirl.com) is now a division of Mattel, but the catalog that made it famous is as active as ever. It’s served 1.5 million mail order buyers over the past 12 months.

  The Middleton, WI company was launched in 1986 and it literally owned this direct mail niche long before it was acquired. Each of its 18-inch character dolls from different periods in American history has a name, a book about her, and a complete wardrobe that can be bought one piece at a time. Mothers and grandmothers of girls over age 8 knew which dolls their daughters and granddaughters had, and they asked each other, “Does she have Josefina? Felicity?” They all knew the product line, and their conversations helped build a powerful national market.

• Collin Street Bakery (collinstreet.com). People smile about fruitcakes as gifts, and many don’t realize that the creator of this market is still in business. We include it because it shows the durability of a successful direct mail enterprise.

Headquartered in Corsicana, TX, the 110-year-old company has a database of 447,300 buyers (217,000 from the last 12 months). Fifty thousand customers bought the original Texas fruitcake, the pecan cake and other treats as gifts, while 121,000 bought these items for themselves.

Collin Street Bakery was founded in 1896 when the Ringling Brothers circus played Corsicana, and many circus people bought Christmas cakes and asked the bakery to ship them to friends and family everywhere.

From these brief accounts, the message is clear: Direct mail still works. And when it’s combined with electronic marketing, as it almost always is these days, it’s unbeatable.

FRED Morath is president of Fred Morath Direct Marketing in Natick, MA.