How to Future-Proof Your Direct Mail Marketing Budget

Economic instability is placing pressure on businesses, and many believe these concerns are far from over. You are not alone as you head into a new year and face new challenges, including rising inflation, budget constraints, and trying to stay top of mind with prospects and customers.

We recently published a comprehensive report about the state of direct mail to understand how enterprise marketers use direct mail to drive growth, how they measure the impact, how marketing budgets are changing, and what the future holds for the channel. We also looked at the differences in responses between those that use technology and software for direct mail campaigns and those who don’t.

The report found that marketing leaders have experienced increased pressure around proving the efficacy of their campaigns. When ROI is paramount, it's tough to ignore the benefits of direct mail. The report proves that the impact of direct mail is undeniable. 74% of marketers agree that direct mail delivers the best ROI, response, and conversion rates of all other channels.

Maximize ROI with your direct mail

In 2022, Gartner revealed that marketing budgets had increased to 9.5% of overall company revenue this year, with offline strategies accounting for nearly half that budget. The 2023 State of Direct Mail revealed that 58% of marketers have more of their marketing budget allocated to direct mail compared to 2022.

If you're doing direct mail right, it is well worth the investment. According to the Data & Marketing Association, direct mail nets response rates 10 to 30 times more than all digital channels combined.

Automating your direct mail campaigns will help you maximize your ROI.

Try the essential direct mail ROI calculator to calculate how much ROI you could get from your direct mail campaigns.

Best practices to future-proof your direct mail marketing budget

There's currently a lot of uncertainty surrounding the economy. As recession rumblings continue, you may wonder how to prepare.

Here are the best practices to future-proof your direct mail marketing budget.

Invest in channels that deliver

Direct mail is essential for companies of all stages and sizes, from startups to Fortune 500s. However, it's just one piece of the puzzle. Those who have mastered an omnichannel marketing strategy know to avoid siloed data and move towards channels that work in unison.

Brands know and value staying top of mind with prospects and consumers in tough economic times, and it shows from their investment in marketing channels that deliver results, like direct mail marketing. Given the ROI impact, 58% of marketers have more marketing budget allocated to direct mail compared to 2022. And 69% have up to 25% of their total marketing budget allocated to direct mail.

Essential read: The Modern Marketer’s Guide to Omnichannel Marketing

Optimize data

Direct mail has come a long way. It is now a measurable and trackable channel that provides an immense amount of data, and that data is the lifeblood of your campaigns.

Our State of Direct Mail found that one of the top challenges that markets that don't use technology face is bad address data. Luckily, bad addresses are easy to fix before sending a campaign using address verification tools. An address verification tool will help you eliminate waste and optimize ROI with address intelligence.

In addition, focus on personalizing messages using relevant data you have about customers from past purchases, local events, or other demographic or behavioral data. 52% of consumers expect direct mail to be personalized for them, with images of past purchases getting the highest response rates.

Essential tool: Address verification API

Establish realistic goals

Another top challenge cited by marketers was response rates. Although 74% said direct mail delivers the highest ROI, conversion, and response rates of all channels they use, many lack confidence in tracking and attributing results. 50% of marketers who automate direct mail feel like their company can determine ROI. If you struggle to determine the value of your direct mail campaigns, consider a direct mail automation platform with built-in analytics and tracking to measure and prove the ROI of every campaign sent.

Essential listening: Use Real-Time Analytics to Improve the ROI of Your Direct Mail Channel

3 tips and reminders when future-proofing your DM budget

1. Focus less on the initial cost-dollar amount and more on the potential of that investment. Direct mail works, especially when automated. When you partner with a platform like Lob, your resources are used to their fullest potential. Some companies are seeing as much as a 200% to 300% ROI from their integrated direct mail campaigns.
2. Test, test, test, and test some more. Leverage the data that's available to you and run A/B tests on every campaign. Use that insight to see where you're missing opportunities. When you know which designs, messages, or audiences perform best, you can focus more of your direct mail budget on them.
3. Understand when direct mail is the right channel. Since your direct mail strategy is within your omnichannel strategy, you must know when to use direct mail. This guide covers everything you need to know when choosing between direct mail and email.

Essential learning: Three Strategies to Grow Your Business in a Down Economy

Intelligent direct mail by the numbers

Learn how other marketers are using direct mail in their marketing strategies to maximize ROI by downloading your own copy of the 2023 State of Direct Mail report.

Intelligent direct mail that gets results

Lob is the only direct mail automation platform to help you transform everyday direct mail into measurable, intelligent mail. What once took three or more months is achievable in less than a week.

Ready to see how Lob can help you optimize your direct mail marketing initiatives in 2023? Book a demo today!