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 increased their mail volumes in 2001, 37% remained stable and 21% reported a decrease compared with the prior year. This marks a major change from 1997 when close to 70% of all mailers reported increased postal mail volumes.
In addition, 68% indicated an increased in e-mail quantity. Those sending more e-mails were less likely to see an increase in postal mail volume.
However, companies with greater e-mail volumes–500,000 and above– were most likely to increase their postal mail. Sixty percent attributed the higher volume of e-mail to its lower costs.
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% reported increased response in 1997, 34% saw no change and 19% experienced a decrease. On the e-mail side, 35% saw an increase in response in 2001, 59% saw no change and 6% noted a decrease.
Meanwhile, 40% reported an increase in 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 increased frequency, 30% remained stable and 2% saw a decline.
Respondents that send more e-mail, were less likely to increase postal mailing frequency. Those sending less postal mail were more likely to increase the frequency of e-mail.
Over 60% of the respondents mailed their housefiles at the same rate they did in 2000. For postal mailings, only 30% increased the use of housefiles compared to 52% in 1997. E-mail results are similar, with 63% indicating that the use of housefile names was stable, 27% noting an increase and 10% reporting decreased use.
Less than one third of all postal mailers reported an increase in the use of outside lists, 60% reported no change from 2000. In 1997, 53% of respondents had increased the use of outside lists. Some 67% of e-mailers said their use of outside list was unchanged.
The respondents used the following techniques to improve response: priority mail history analysis (93%); mailing to the housefile (93%); hotline mailing (91%); re-mailing to multi-buyers (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 mail volume increases. Some 57% of companies with mail volumes over 30 million 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 decreased 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 spend $500,000 to $1 million, whereas 48% with volumes under 3 million spend less than $50,000.
But the respondents are optimistic about 2002 is positive. More than two-thirds project significantly or marginally better business conditions when compared to 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.
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