When companies ask me if direct mail works, I almost always answer them: ‘Not the 1st time around’.
Direct mail has been proven to work for many years; however, companies generally have unrealistic expectations on their first direct mail campaign. After hiring a copy writer, graphic designer, mail house, and spending the money on printing, postage etc., companies are expecting the phones to start ringing.
However with a typical 1-2% response rate, a mailing of 5,000 records will not normally yield a high enough response rate to cover the cost of the initial campaign cost, and the CPA will be low.
Direct mail does normally work when companies set aside a large enough budget to allow them to test different lists and mail pieces. For example, if a company tested 5 mailing lists, they can take the top 1-2 lists and try using different creatives (postcards, inserts, coupons) to see which medium yields the highest response rate with which mailing list.
Back-end list analyses are also crucial. Not only is it important to keep track of the upfront response rate, it is also important to track the back-end results.
Direct mailers must learn to leverage digital media to enhance the effectiveness of their postal mailing. Email, SMS and telemarketing followup to a direct mail piece is verified to be a powerful tool.
In summary, I believe that direct mail does work with a smart preplanned front- and back-end marketing campaign that has a large enough budget to enable companies to try different creatives and mailing lists.