Direct mail and email used together in a multi-channel campaign can work wonders for your ROI - or sink it. 

No doubt, email is HOT and AccuData helps many companies develop and execute multi-channel campaigns involving email and direct mail.  But I find myself advising clients quite frequently NOT to marry email and direct mail – at least not in the way we are often asked to do it - which is to simultaneously drop email and direct mail together to the same list. 

Why?

The problem is that a careful economic analysis often shows that while the output metric of such an approach is often better (e.g., response rate), the ROI can be much worse.  Think about this simple math:

Let’s say your champion approach is a direct mail program that generates a 1% response rate at a cost of $0.50 per piece.  Now you layer on email and the cost of doing this is $0.05 or 10% of the direct mail cost.  That means your total response needs to be 1.1% to break even.  Make sense?

But in reality the cost of email can be higher, especially if you are prospecting for businesses or other targets that require you to purchase managed or specialty email lists.  So the cost could be more than 10%, maybe 20% or more.  So now you need a 1.2% response rate to break even.  Now that just covers the cost of the email – we’ve not factored in other costs such as the cost to develop the email creative, the cost to develop an effective website or landing page, etc. 

It is possible to generate incremental lift of 10% or 20% by coupling email with direct mail in the same drop - absolutely.  But in many cases we don’t see this result and the campaign winds up driving more sales, but at a higher cost per sale.

Now there IS a potentially better way to use email effectively in tandem with direct mail.  It’s called channel switching.  I’ll blog about that next time.