The Future of Direct Mail is built on APIs: A Functional Take from the Founder of Lob

Direct mail is moving forward, and it’s more important than ever to have tools and integrations to send mail. Enter Lob. The team at Lob is passionate about APIs that automate the operational hassles of direct mail. Co-founders Harry Zhang and Leore Avidar started Lob with the goal of building a suite of APIs to power direct mail initiatives for companies around the world.

Today, Lob sees millions of API transactions per month, and is growing at breakneck speed. But how did the team get here, and where do they hope to go? I sat down with Harry Zhang, one of Lob’s co-founders, to learn more about direct mail, APIs, and where Lob fits into the puzzle.

Many people don’t really understand what an API is. How do you explain it?

HZ: When you use an API, you’re essentially just passing data from one system to another.

Many direct mail users have used FTPs. The problem with FTPs today is that you can put data in, but you can’t get data out of it. Once you drop it in there, it’s gone. There’s no response. There’s no live feed of what happened.

With an API it’s different– it’s the new modern age technology. When I send you something, you can give me a response back, and then you can pay me for more information. So it’s a real time feed of data that can go back and forth.

What does Lob do, and what are your goals for the future?

HZ: Lob offers a suite of APIs built around print and mail. We want to change how companies use direct mail, but we don’t think of ourselves as just a mail company. For us, it’s really about building tools and resources that companies can use to really streamline their mail process. Our goal is to send physical mail as easily as email. By streamlining this simple process, we can apply our lessons learned to many different APIs–to facilitate real-time data transfers that match the rapidly growing “right now” economy. Using APIs to power direct mail is just the start!

Lob is an API company that specializes in direct mail. What lessons have you learned?

HZ: People do want more physical mail, but they definitely don’t want spam mail. They want mail that’s relevant to them and the things that they care about. It’s powerful for people to hold a piece of direct mail in their hands, especially if it’s personalized. Roughly 80% of people browse household mail, which is a pretty big number. The majority of people aren’t reading close to 80% of their emails. The key, in using APIs–when people want information, in the moment–is the ability to bridge communication bottlenecks with agility and speed.

What has the world of direct mail taught you about the future of APIs?

HZ: We really think of ourselves as building multiple APIs, and our APIs don’t have to be for the sole purpose of sending mail. However, what we’re building today and what we talk about is a print and mail API.

Through our company, you can now send a letter, postcard, or even a check as easily as you send an email. But the next layer of what we’re building at Lob is around data in the service layer. So you can find additional information that you don’t know about your users and offer that through an API.

We offer additional services beyond being a mail company. As an example, we have an address verification API. Address verification is typically related to mail, but someone doesn’t have to send mail to use that API.

Can you share a use case for when someone might use an API for direct mail?

HZ: Traditionally, companies send large mass mailings to a ton of people. When using APIs to power direct mail, it can get a lot more personalized. When customers use Lob, they have to really think through what triggers they want to send mail. For example, when someone signs up for information on a website, it could trigger a welcome letter that goes out in the mail. This welcome letter increases your brand image, and helps establish that you’re relevant. Because these companies are using APIs, this process can easily scale.

What about the cost? If I wanted to send a physical letter to all of my customers, what would it cost me?

HZ: It’s $0.95 or less depending on your volume. When you look at customer acquisition, many people pay $50 – $100 per customer, if not much more. While the cost of sending email is almost nothing, you have to send lot more email than you do mail.

In today’s world, $130 billion in the U.S. gets spent on marketing, and $45 billion is spent on direct mail. That’s the single largest category that exists today. When you think about all of the search and display ads, and everything that people are talking about, direct mail gets people’s attention.

How successful has Lob been so far? What does that growth rate tell you about the future of APIs?

HZ: We’re growing at a ridiculous pace. We’ve raised over $9.5 million in funding. We process millions of API transactions a month, so we’re printing millions of pieces of mail.

We look at API transactions as the most important mark. Not only does it show that people are using our product, but it also shows that people are investing developer energy and resources to build tools around the product. So it’s not just we’re enabling people to send mail, but we’re enabling companies to have the functionality to send mail on behalf of their customers.

What do you wish people knew about Lob?

The way companies are building products and services are changing in this new API economy. APIs are the building blocks and Lob will enable companies to look at their processes in an entirely different way.

Even today, we are seeing an extension of the use of direct mail beyond just acquisition and deeper into the funnel. Companies are looking at how they utilize the data they have about their customers to send more relevant offers than ever before.

The future for direct mail is looking bright. It isn’t about sending more direct mail, but rather sending smarter direct mail. I expect that we’ll see more clever, dynamic creatives in the mail based on customer actions and an increasing use of triggered direct mail.

Wrapping up

Today’s APIs are powering successful direct mail campaigns. They allow companies to set up automated, personalized processes that limit time, energy, and costs for transactional and marketing mail. Lob’s team has built APIs to power direct mail, a channel that’s proven ROI time and time again.

To learn more about the birth of Lob and the proliferation of APIs, listen to Mixergy’s interview with Harry Zhang.