Marketing Study Shows Integrating Direct Mail and Email Will Improve ROI

Integrated programs are able to optimize contact strategy across multiple marketing channels while delivering a consistent message and consistent offers. Companies with integrated programs avoid practices that sacrifice customer value by trading off vehicle-specific goals and objectives. Integrated marketing programs allow companies to fully leverage the strengths of each vehicle.

The marketing study suggests that there are several reasons to integrate email and direct mail programs. Marketers can:

• Save money by eliminating contacts that do not generate incremental financial returns.
• Generate incremental net revenue by creating more effective, customer-centric programs.
• Reduce email attrition by eliminating unwanted contacts.

The report describes initiatives and modifications needed to integrate direct mail and email as a starting point to developing fully integrated direct marketing programs.

Revenue vs. Margin By Contact Method

The following graph demonstrates that consumers who receive both email and direct mail generally contribute more revenue per household. Consumers who receive both email and direct mail on average contribute about $17 in revenue and about $4 in margin per household.

By comparison, consumers who receive direct mail or email only do not perform as well as when email and direct mail marketing are combined.

• Consumers who receive email only contribute an average of just over $15 of revenue and just under $4 of margin per household.
• Consumers who receive direct mail only contribute an average of just under $9 of revenue and about $2.50 of margin per household.
• Consumers who receive neither type of communication average about $7 of revenue and about $2 of margin per household.

Direct Mail Consumer Value by Contact Frequency

The report also shows that although increased marketing contacts will generally drive increased revenue, the additional contacts may not pay for themselves from an ROI perspective. If email and direct mail contacts are evaluated in isolation, then a company’s efforts are not likely maximizing ROI.

The following graph shows the impact on total revenue and margin per consumer who have had multiple contacts. Each segment received standard email communications during the test, followed by “business as usual” direct mail to an email eligible audience.

The data demonstrates that although contacts are nominally profitable from the perspective of one vehicle, sending all contacts a single direct mail piece may not maximize marketing return. Only when email and direct mail programs are integrated can marketers maximize customer level ROI.

Recommendations For Maximizing ROI

The report offers advice on how to maximize their ROI and avoid pitfalls that can lead to dwindling margins from multiple customer contacts:

• Reduce Agency and Production Costs
• Improve Resource Efficiencies
• Improve Customer Experience
• Improve Focus on Engagement and Consumer Value

The Merkle marketing report is available as a free download online here: http://www.merkleinc.com/emdmintegration/