Cost Effectiveor Costly?

IS YOUR MARKETING

With an average open rate of nearly 80%, direct mail is a marketing mainstay. By harnessing data and

reducing mailing, printing, and delivery costs, there’s no telling how far marketers can take their results.

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Introduction

Q&A with Tim Healy

Watch for More Flexibility in USPS PromotionsNew rules from PRC allow the Postal Service to bank price decreases and apply them else-where, allowing for more flexibility in its annual promotion schedule.

7 Do’s and Don’ts for Cross-Channel Direct Mail CampaignsDo test which channels are producing and don’t leave out any stakeholders, and you can boost response by 35%.

Who Really “Owns” Customer Data?With Big Data comes big responsibility. So, between marketing, IT and legal, who exactly owns this data? Winterberry Group’s Bruce Biegel breaks down data ownership once and for all.

There’s No “Us” and “Them”When it comes to data, consumers and marketers are on the same team.

Is Your Database a Pigsty? [Infographic]Some marketers’ data hygiene practices have gone a little “sow”er.

Data Quality’s Dirty Little SecretA new survey links data quality to revenue growth.

Just Mail? It’s Your Lifeblood. [Advertorial]Novitex President Tim Healy reveals how to maximize what’s in your envelope.

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Is Your Marketing Cost Effective or Costly?With an average open rate of nearly 80%, direct mail is a marketing mainstay. By harnessing data and reducing mailing, printing, and delivery costs, there’s no telling how far marketers can take their results.

It’s clear that multichannel marketing bolstered by direct mail is the way to go to reach today’s ever-distracted customers. But when

marketers neglect the data that’s at the core of their multichannel efforts, or the processes that enhance those efforts, they’re unable to

optimize the performance of those campaigns.

What’s more, not giving data and processes their due decreases the potential for positive outcomes like customer inquiries, regis-

trations, and sales. In fact, marketers who improve the efficiencies of their direct marketing processes can increase the profitability and

performance of their campaigns. Consider direct mail, which is often central to multichannel marketing; reducing mailing, printing, and

delivery costs can have a significant, positive impact on campaign results.

By rethinking the data strategy need to support a multichannel marketing initiative, as well as the processes required to optimize it,

marketers can see results they won’t have through a siloed or staid approach. Here, we present a selection of content to help you improve

the efficiency and performance of your marketing methods, and increase your multichannel marketing effectiveness in the process.

Direct Mail’s Continuing Legacy: A Q&A With Tim HealyTim Healy is of the opinion that the majority of marketers either misuse or mismanage the direct mail components of their marketing campaigns. Direct Marketing News spoke with Healy, a 39-year Postal Service veteran and current President of document outsourcing provider Novitex, to find out why.

Q: You say direct mail is not going away. Why are you so sure?A: It has to do with how humans react to something tangible in their hands. Engaging their tactile senses helps reinforce the message. The average open rate for direct mail is 79%. No digital method can ap-proach that. Research we did at the Postal Service showed that about 82% of people pick up the mail at the very first opportunity. Nine-ty-one percent of mail is picked up by same person every day. We call that person the mail CEO, and 80% of them are women who are largely responsible for paying the bills and managing correspondence.

Q: Digital marketers decry the expense of direct mail. Tell us about the payback, especially when direct mail is integrated with digital methods.A: Response rates for direct mail can be as high as 4.5% if your mail-ings are targeted well. You’re not getting a 4.5% return on any form of digital. When you hook up digital and hard copy together with a QR code or a link to a personalized URL, it’s huge. The key here is that every piece of hard copy mail received is taken in and only 21% of it is discarded. On average, that mail CEO spends about 6 minutes per day thinking about what to do with the mail.

The lesson is to communicate with customers the way they want to be communicated with. Formulate the right blend of digital and hard copy and link it together. This is one of the big misses.

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Watch for More Flexibility in USPS PromotionsNew rules from PRC allow the Postal Service to bank price decreases and apply them elsewhere, allowing for more flexibility in its annual promotion schedule.

In final regulations on mid-year rate reductions released this week, the Postal Regulatory Commission (PRC) created a Type 1-C rate adjustment that allows the U.S. Postal Service to reduce rates and bank the difference in relation to the cap based on the Consumer Price Index.

If, for example, the CPI is 2.5%, and it elects to file rate increases of 2% across the board, it generates some cap space that it could now hold in reserve to apply to decreases in other rate classes or bulk mailer promotions. USPS may not, however, combine the Type 1-C filing with any other rate filings.

“The new rules for Type 1-C cases provide the Postal Service with additional flexibility to propose and implement price decreases—in-cluding promotional rate incentives—without having to recalculate all available CPI pricing authority,” says USPS spokesperson Katina Fields. “At most, the new rules simply give the Postal Service the ability to change the timing of when it proposes its annual calendar of promotional rate incentives, which under the prior rules, had to be proposed with the annual price change.”

The PRC rules provide additional guidance designed to give great predictability to the mailing community in making decisions that rely on the Postal Service’s authority to adjust rates under the price cap.

Type 1-C rate reduction filing is created.

7 Do’s and Don’ts for Cross-Channel Direct Mail CampaignsDo test which channels are producing and don’t leave out any stakeholders, and you can boost re-sponse by 35%.

A big theme at the National Postal Forum is the integration of digi-tal methods into traditional direct mail programs to wring maximum results from expensive print programs—made more so by this year’s huge postal rate increase. Right on the money during workshop sessions at the Forum was Rhea Friederichs, solution specialist at the John Roberts Company, who offered a common sense guide to cross-channel campaigning for career direct mailers ready for a little digital diversion. A sampling:

DO create a campaign flow chart that lays out the timing of the var-ious channel components before the effort launches. What are the behavior-based touchpoints and when will interactions there take place? Is fulfillment part of the program and, if so, when and how will it occur?

DON’T leave any stakeholders in your organization out of the cross-channel campaign planning process. Have your project leader call a planning meeting of key players from IT, customer service, sales, and any other unit that will be involved with the campaign. Recipients who visit personalized URLs often think they’ve landed on the main company website, so Web managers, for instance, need to be brought into the process to ensure a relevant and clear customer experience.

DO, at the outset of the campaign, define primary and secondary goals for projected revenue, customer actions, and data acquisition like email and phone number. While you’re at it, define success for the overall campaign and for each individual channel. “How on earth do you know if you’re successful if you don’t define success?” Frie-derichs asked. “If your goal was 5% and you hit 15%, there’s going to be excitement at the next stakeholders meeting. That’s especially valuable when things start getting rocky between the silos.”

DON’T use email to send recipients a digital facsimile of the direct mail piece they’ve already received. The average length of consumer interaction with a direct mail piece is 1.7 minutes, Friederichs said. Use digital methods to “add a smile” to your print pieces with per-sonalized appeals that will make recipients want to re-engage.

DO test all your cross-channel campaigns to see what combinations of channels are delivering the best results. The average direct mail response rate of 6.5% can be increased by as much as 35% using re-fined multi-touchpoint strategies, Friederichs claimed.

DON’T deploy a refer-a-friend campaign—which incentivizes current customers to recruit friends and family via email and social media—when your company is experiencing troubling service issues. “Peo-ple respond negatively to a request for referrals when they’re having problems with your company,” Friederichs said. Imagine the backlash Target would have faced from customers had it asked them for refer-rals during its recent customer data breach.

DO gather your cross-channel team when the final reporting is in and review results by channel. Take a close look at metrics for sources of engagement. “If 17% of people hit your landing site via mobile, that’s notable,” Friederich said. “Document the behavior-based results in each channel and disseminate them internally to inform future cam-paigns. Avoid the one-and-done syndrome.”

Who Really “Owns” Customer Data?With Big Data comes big responsibility. So, between marketing, IT and legal, who exactly owns this data? Winterberry Group’s Bruce Biegel breaks down data ownership once and for all.

Marketers have an advantage in the wealth of data available to them. No piece of customer information is far from a marketer’s reach these days. But one ambiguous aspect of customer data is who should “own” it. Who’s responsible for its integration and availability? What about its security? Is it marketing, the team that converts all this data to actual insight? Is it IT, the group that develops and maintains the databases? Is it legal, the people who handle the fallout when issues arise with data usage or procurement?

“They all own it, but we’ve got to get everybody to cooperate,” Bruce Biegel, senior managing director at Winterberry Group, told attendees at the Direct Marketing News 2014 Marketing&Tech Part-

nership Summit. “This is about partnership. This is about coopera-tion. This is not about ownership.”

According to Biegel, data governance and security is an enterprise issue that transcends individual silos. However, “these responsibilities are often at odds with marketers,” he said.

Consider the ramifications of a security breach similar in magni-tude to the recent Target debacle. Generally speaking, that would qualify as an IT problem. However, when legal clamps down and insti-tutes company-wide policy regarding customer data, those policies often have marketing ramifications.

So, what should marketers do? They should understand data ownership, but they should also respect and understand the data process and the differences between different data sets. “There are two types of data like there are two types of wine,” Biegel explained. “Wine you like and wine you don’t like. PII data and anonymous data.” Marketers know exactly who the target customer is with PII (personally identifiable information), while anonymous data is, well, anonymous. However, even leveraging anonymous data incorrectly can place marketers in precarious positions that could cost their company millions of dollars.

Marketers only have one real option: collaboration. “The problem is these silos,” Biegel said. Not only should marketers foster and nur-ture a collaborative relationship with IT, but they also should include legal as early in the process as possible. “They’re the ones who un-derstand what’s going on in Washington and on the regulatory land-scape,” Biegel said.

Working with, instead of against, legal gives marketers something of a prophylactic advantage in when it comes to ethical and effec-tive data usage. Before any type of security or privacy issues arise, collaboration should ensure that marketers are educated enough about the legal nuances of customer data collection and use to clearly identify what data can be used for what Biegel cites as the four key customer data use cases: attribution, insight, optimization, and targeting.

Armed with this knowledge, and with legal in their corner, mar-keters can more effectively collaborate with IT to find actionable data to inform their strategies and campaigns. The temptation to simply bypass IT entirely and use cloud-based marketing automa-tion to do this is strong. However, marketers who do will not find success, according to Biegel. “At some point that marketing tech-nology needs to plug back in to the data sources,” he said. “IT is the best partner for this.”

Bruce Biegel at DMN Marketing & Tech

Partnership Summit

There’s No “Us” and “Them”When it comes to data, consumers and marketers are on the same team.National privacy conversations are introducing troubling aspects that threaten the very bedrock of successful one-to-one marketing: customer engagement. Despite repeated and dogged attempts, no one—not Congress, not the FTC, not the producers of 60 Minutes or CNN—can actually find any harm to consumers from the responsible use of marketing data. Still, recent broadcasts and articles about the use of marketing data and predictive analytics (often called “con-sumer scores” to make them sound scary) have pitted consumers against marketers. But, in fact, we’re on the same side.

Consumers and marketers want the same things when it comes to using data for marketing purposes:

1. Consumers want to choose what they receive, in what channel,

and when.2. Consumers want to receive offers that are important to them.3. Consumers expect marketers to recognize and greet them

across channels.4. Consumers are delighted when their loyalty is celebrated

and rewarded.5. Consumers want great offers from brands they love. They also

want to be “insiders” and receive—early information and access to cool engagement experiences.

Marketers want all that, too—not just to save on marketing costs by using more effective and responsive segmentation and offer strat-egies, but also because they truly want to build relationships with customers and increase loyalty and brand trust. After all, trust is the foundation of customer-brand relationships. It’s a precious asset that the best marketers care about, protect, and nurture carefully.

Responsible and relevant marketing earns that trust every day. Consumers are ready for marketers to meet them across channels, devices, wearable gadgets, and product lines. The level of trust is demonstrated by their active participation, their constant online ex-ploration and engagement, and their willingness to provide prefer-ence information and engage with brands in a multichannel way.

I’ve often said that self-regulation is doing the right thing before someone regulates that you must. Our industry has operated suc-cessfully under a self-regulatory model that protects consumers and innovation and is responsive to market evolution.

Every marketer is part of that success. When we all take the time to act responsibly, follow, and embrace the letter and spirit of in-dustry standards and guidelines, we contribute to the continued self-regulatory status of our industry.

Why must we be extra vigilant and transparent now? Self-regula-tion is under attack both in the halls of policy makers and in the living rooms of public opinion. But self-regulation protects consumers and businesses without stifling innovation or hampering the economy. Here’s how:

1. Self-regulation promotes innovation. Consumers love their da-ta-driven lifestyles, as evidenced by their high participation in every aspect of e-commerce. Marketers make that happen. Restrictive leg-islation would kill off the innovative aspects of data-driven market-ing, including cutting-edge customer service, rewards, preferences, relationships, and ever-greater relevance.

2. Self-regulation is nimble. Unlike legislation, which is static and runs the risk of codifying practices that may become out-of-date

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Q: Are there ways to decrease mailing costs without decreas-ing response?A: There are many ways to decrease communication cost—or to increase communication cost and increase the value in return. You have to ask yourself the right questions about your mailings. What am I sending to a client? Why am I sending it and how and am I sending it? Am I sending it to the right person at the right address? What action do I expect in return? Also, am I making the most of my postage dollars? The Postal Service has a policy that the second ounce rides for free. I have a nonprofit client in healthcare that will mail to a list of people concerned with a particular disease, but then include additional material about other healthcare issues they may also be concerned with.

Q: Do a lot of companies miss this opportunity?A: Most companies don’t take advantage of what the Postal Service offers them. They’ve already paid for the envelope and the postage and the list. Now they could make the much smaller investment by printing a few more sheets of paper with additional information or offers that could be placed in the same envelope for nothing by just inserting the document into the workflow.

Q: Do most companies have a good handle on their mail flows?A: They think they understand the mail flows, but they really don’t. Each department understands their little piece. Outbound mails it out. Inbound takes it in. Few understand the full integration of com-munications they have with the client and where they cross over.

Q: What’s the key to getting that done?A: Just as with digital methods, they have to analyze data from the mail flow. Capture it, extract it, and act on it. All of that is crucial to closing the loop. Then you can respond to customers by saying, “We’ve received your request and you’ll be hearing back from us in so many days,” or you could respond with another document. The key is to organize it, to pull a customer’s name from a file and see their mail history.

Q: But isn’t it harder to track mail than digital communications?A: Companies get hard copy mail every day. Every piece does not have the same value. How do we take the things important to their business and integrate it into the business. What you do is create a

digitalized copy. I can’t believe more companies don’t do that to get their mail and other received communications into their workflow process quicker. Novitex worked with a national insurance company that was behind on claims. It didn’t have enough adjustors. We said, “Why don’t we do that for you?” We take all the mail, open it, scan it, and index it into a claims file. The processors come in and have it all waiting for them.

Q: What’s the near future for mail?A: Mail was first put in place for people to send letters to each other. Then it became the chief means of paying bills. Now it’s become a valuable piece of the marketing and fulfillment landscape. Think of e-commerce and package delivery; it’s going to continue to explode. Mail reinvents itself to meet the needs of the marketplace. But will it ever be dead? Never.

even before a bill turns into law, industry self-regulation is nimble by its very nature and better suited to provide protections in innovative, fast-evolving areas like Big Data analytics.

3. Safeguards are already in place. The remarkable growth of the data-driven marketing economy is due in part to the robust frame-work of sectoral laws and self-regulatory protections that already apply to the use of Big Data for marketing purposes. And for more than 40 years, the Direct Marketing Association (DMA) has pro-mulgated and enforced its Guidelines for Ethical Business Practice, which inform marketers about the responsible collection and use of data for marketing purposes.

4. Consumers have choices. Through DMAchoice consumers can exercise their preferences about the mail they receive. In addition, the AdChoices icon enables consumers to opt out of any or all be-havioral advertising.

5. Self-regulation is in the best interest of both marketers and con-sumers. Marketers work daily to serve individuals by delivering rele-vance and honoring their choices. Abiding by self-regulatory guide-lines and using consumer data responsibly helps marketers earn consumers’ trust. In turn, consumers derive the greatest value.

6. Self-regulation works. Marketers have responsibly collected and used data for marketing purposes for more than 100 years. Market-ers are the best stewards of marketing data out there. They use it responsibly to maintain excellent customer service while honoring individual customer preferences.

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Data Quality’s Dirty Little SecretA new survey links data quality to revenue growth.

Few marketers would argue that dirty data is a widespread problem. Even fewer could tell you how much of a problem it actually is.

That’s because dirty data—incorrect, incomplete, and duplicate information about prospects and customers lurking in marketing-au-tomation and CRM systems—is a lot like back pain, notes Jerry Rack-ley, chief analyst for Demand Metric, a global marketing research and advisory firm. Most organizations endure the pain associated with dirty data, but few do anything to alleviate the pain; many simply accept it as a fact of life in the era of analytics.

They shouldn’t, according a new survey on data quality that Rack-ley and his team conducted. The survey finds that organizations that are experiencing revenue growth are about three times more likely to have clean data than organizations with flat or declining revenue growth. Although excellent data hygiene cannot be said to result in higher revenues, the research indicates that clean sales and market-ing data contributes to revenue growth while dirty data inhibits rev-enue growth.

“The business case for keeping data clean is compelling,” says Rackley, who undertook a survey that he describes as the “the state of the union of sales and marketing data quality [to better under-stand] what kind of relationship exists between data quality and something that matters.” Revenue certainly should matter to orga-nizational leaders, the majority of whom do not appear to treat data quality as a matter of strategic importance; at least not yet.

Although 63% of survey respondents describe their sales and mar-keting data as dirty, more than half of them (55%) indicate that their companies have no formal data-cleaning process in place.

That’s disconcerting, but the survey findings also indicate that dirty data hardly qualifies as an insurmountable problem. Asked to identify why their organization lacks a formal data-cleansing pro-cess, the largest segment of survey respondents identified the fol-lowing reasons:

1. Data hygiene is not a priority (49%)2. A lack of data-cleansing skills (37%)3. Lack of knowledge about data-cleansing options (21%)

Only 11% of respondents indicated that their companies viewed data-cleansing as being too expensive. “The reasons organizations are not managing data hygiene does not have much to do with cost,” Rackley says. “Mostly, this inaction relates to a sense that data quality is not a big deal; that it’s an out-of-sight-out-of-mind problem.”

Data quality ought to be a front-of-mind problem now that the nature of the issue has been quantified.

Just Mail? It’s Your Lifeblood.Novitex President Tim Healy reveals how to maximize what’s in your envelope.

InfoTrends analysts predict digital com-munications will double in the next three years, putting less emphasis on physi-

cal communications. Novitex President Tim Healy refuted these predictions during our inaugural Innovator Chat, “How to Maximize What’s in Your Envelope,” hosted by Direct Marketing News.

Instead, Healy urged viewers to take a look at the past. The last two years reveals that digital communications is growing at a rate of 12 percent year-over-year on aver-age. At this rate—or even at a slightly accel-erated pace—physical communications will remain dominate and will still play a critical role in your communications strategy in the near future.

Why is this important to understanding how to maximize what’s in your envelope?

To effectively and efficiently communicate with your customer base, you need to under-stand just exactly how and when customers want to engage with you. For example, data reveals that 95% of Americans open physical mail on the day of receipt, whereas only 19% of Americans open marketing emails.

In order to understand customer prefer-ences, you must leverage data.

However, departments within businesses frequently work in silos, making it extremely difficult to capture data.

Healy provided a real client example during the Innovator Chat. He described three departments working individually,

sending separate communications and thus bombarding the same customer with several communications through a variety of chan-nels (depicted below).

The client’s siloed workflows results in wast-ed resources and lower customer satisfaction.

What’s more, though, is that this siloed approach helps perpetuate unclean, uncon-nected data. Inaccurate record keeping leads to 2.3% of emails bouncing back and 24% of physical mail having an address problem.

Integrating your communications from the

first mile to the last mile can significantly help reduce or eliminate these challenges, accord-ing to Healy.

Healy continued with this client example, revealing how we integrated its workflows. He explained that we leveraged our indus-try-leading, proprietary Integrated Docu-ment Life Cycle™ (IDLC™; pictured below) to connect our client’s first and last mile by link-ing communications; this empowered our cli-ent to leverage data.

Here’s how it works: We intercepted the

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three communications, integrated them and then sent them via the preferred channel. In this instance, it was via the mail. In order to track the communications through its en-tire life cycle, we attached a 3D barcode to the mailpiece. Once the customer sent a re-

sponse, we were able to scan the barcode, linking the inbound and outbound commu-nications. During the last stage, we entered this communication into a digital repository that automatically stores it, ensuring com-pliance with federal regulations.

By linking this one communication from the first to the last mile, we were able to streamline workflows, reduce costs, provide an optimal customer experience and ensure compliance for our client.

Each industry and company has unique challenges, resulting in different communica-tion needs. However, the IDLC™ paired with industry-specific expertise provides you with your needed resolution.

Though each industry and company is dif-ferent, the end receiver of your communica-tions is the same. A human.

Healy urges you to take a second look at the way that you communicate in both your business and personal lives. By understand-ing your own personal communication pref-erences along with your data, you gain in-sight into how to better communicate with your customers.

Efficient and effective customer commu-nication delivers tangible results: Streamlined workflows, improved customer satisfaction, increased compliance and profit growth.

This is why mail isn’t just mail—it’s the life-blood of your company.

About Novitex: Novitex is a digital-first, document outsourcing provider that specializes in the Integrated Document Life Cycle™ (The IDLC™). The IDLC™ provides an end-to-end, cloud-enabled approach to business-critical services, ranging from delivery of targeted communications to records management. Our 30 years of experience paired with our drive for constant innovation has made Novitex the go-to provider for the Fortune 500 and government entities.

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