Direct Mail Still Preferred

I’ve written extensively about the mindset of today’s marketers to overemphasize the consumer’s preference for digital media over traditional postal. Digital is soaring and grabbing more and more of the advertising budget.

However that’s not the consumer’s preference. A recent study was conducted and not surprising, to me, is the consumer’s preference for postal mail vs. digital, social and mobile channels. This study clearly shows that consumer desire for postal mail continues to be strong.

The new report, Channel Preferences for Both The Mobile and Non-Mobile Consumer, found that, despite a more digitally-focused world, a majority of consumers still prefer postal mail for a large portion of their multichannel communication. This was especially evident with regard to financial services communication, where 38 percent of the U.S. households surveyed preferred receiving postal mail compared to 17 percent desiring information over the internet and 7 percent via email. Only health related communication had a higher preference for postal mail, indicating the advantage of direct mail for communicating sensitive information.

Interestingly, this preference for direct mail extended to smartphone owners and was actually slightly higher for households owning a tablet device. Tablet users are also roughly 50-60% more likely to prefer receiving information via email and the internet than non-tablet owners, illustrating their more digital focus as a segment.

As can be seen below, the digital channels aren’t the most preferred, but there is still a group of consumers who prefer to receive online offers. As with any group, however, this target market should be further segmented by device ownership and the ways they use their mobile devices.

In a related report from the Raddon Financial Group, it was found that while most consumers don’t want to be contacted, those who did preferred direct mail over email by a small percentage.

Relevancy Still Rules

The desire for less clutter and more relevancy is an overriding desire from consumers with all channels as could be expected. The Raddon research above showed that consumers feel inundated with communication that does not interest them. That said, consumers still like postal mail.

Continuing a theme found in last year’s study (covered in the blog entitled, “As Channel Proliferation Increases, Consumers Still Prefer and Trust Direct Mail for Financial Services Communication”),consumers also indicated an ‘enjoyment’ from visiting their mailbox and receiving direct mail, while being somewhat overwhelmed by the amount of communication received electronically.

From a marketing perspective, these attitudes emphasize the importance of sophisticated targeting and clear messaging when using any direct media. While the cost of digital channels may appear to be comparatively low on the surface, this does not validate using a ‘carpet bomb’ approach to communication since it definitely impacts open rates and negatively impacts the customer experience. In addition, with the majority of consumers indicating that they receive more emails than they can open, any cost advantage of digital communication may be negated if the communication goes unopened.

For those consumers who preferred direct mail, the primary reasons included the portability of the channel (you can read it now, read it later or pass it along). Interestingly, among those who preferred digital channels (email and online) to postal mail, the same two reasons (convenience, ability to refer to later) topped the list but in reverse order and with lower overall enthusiasm (45% and 42% respectively).

Direct Mail More Trusted Than Email and Social Media

Compared to a ‘trusted advisor’ such as a doctor, healthcare provider, friend or family member, all media channels underperform from a trust perspective as shown below. In fact, the strongest marketing channels in terms of trust (newspapers, company websites and online search) are perceived to be less than half as trustworthy as family and friends and have only a quarter of the respect as healthcare professionals.

But while trust in direct mail was modest compared to other marketing channels, the postal channel was still almost twice as trusted as email (18% vs. 11%) and three times as trusted as social media channels. From a gender perspective, women tend to be more trusting of all channels than men.

This channel/media trustworthiness should be considered when marketing financial services. Many of the marketing journals discuss moving channel funding from direct mail and mass media to digital, mobile and social media. While trust may not be as important in retail and the other industries they reference, it is very important with banking and credit union products. This may explain the vast difference in channel preference shown above.

Impact of SoLoMo Marketing

With the increased penetration of smartphones, the combination of the power of social, local and mobile communications will definitely gain in importance. This marketing trifecta is already being tested with various degrees of success with applications like Foursquare and Groupon and independent mobile ‘push’ applications that can provide personalized offers based on your location and purchasing habits. But, with trustworthiness of social media still being less than 10 percent, the power of these channels to market financial services remains limited.

According to the Epsilon study, consumer desire to receive ‘offline’ offers based on their social media engagement is very limited (17 percent in the U.S.). The percentage of households who want to receive a mobile offer based on their location at any given time also seems to be low at this time which may be a function of awareness and understanding of the benefits as opposed to disliking the concept overall. While there may be a potential with SoLoMo marketing, the technology capability may definitely be ahead of the need in this area, especially in financial services.

Implications for Financial Services Marketers

While this most recent channel preference research by Epsilon and past research from firms covered in this blog continue to emphasize the importance of direct mail, none of these findings should be viewed in a vacuum or used to eliminate one channel or another from your marketing mix. Instead, a multichannel strategy should be pursued, understanding the importance of trust, consumer channel preference and the benefits of each communication channel. In addition, an ongoing test and learn mentality needs to be utilized to determine the ROI implications of each channel ‘blend’.

At a time when ‘big data’ is garnering many of the headlines, marketers would be wise to use this research as a guide for capturing ‘small data’ such as current email addresses, mobile phone numbers, and even customer channel preferences. Retailers such as Nordstrom collect this data as part of all daily customer interactions. With this insight, we will be in a better position to deliver relevant messages, using each customer’s preferred channel at the perfect time.

Trust in all communication through all channels can be increased by reaching consumers using their preferred methods. This will result in improved results and a better customer experience. This trust will provide the foundation for enhanced communication, and the utilization of potentially powerful SoLoMO strategies in the future.