One Size Never Fits All: What Retailers Can Gain From Direct Mail Personalization

Personalization has been touted as a strategy that will help retailers battered by Amazon.com and other market forces. Targeted communications that are relevant and useful can create lasting customer loyalty and drive revenue growth of 10 percent to 30 percent, according to a recent McKinsey & Company report.

Technology is not a barrier. Given today’s digital print capabilities, the personalization options available to retailers are almost endless. Yet the sector isn't doing as much as it could to personalize direct mail. Why? The reasons go back to four main rationales; recognizing the pitfalls inherent in those rationales is the first step to engaging customers with an effective direct mail personalization strategy.

1. This is the way we’ve always done direct mail.

Retailers are in the habit of sending the same flyers with the same or very similar offers to their entire customer and prospect list despite all the data they have about their customers’ buying habits. This means that, for example, even when a retailer knows customer X only buys men’s merchandise, customer X still receives a mailer with women and children on the cover and mostly women’s products inside. That’s another lost opportunity to engage that customer personally by addressing his or her specific interests, and another reason the customer might look to another retailer when shopping.

2. This is our brand identity, and we deliver the same brand to all audiences.

Many retailers want their brand to be identified as vibrant, energetic and hip, so they use images of young, active adults in their mailings. Someone who isn’t in that age group, say a 55-year-old empty nester, sees those images and thinks, “That looks like my daughter, not me.” It gives him/her one more reason not to open that piece of mail. Retailers need to ask themselves, “How much of what I’m showing is resonating with my customer?”

3. I have so much data on my customers, I’m not sure how to use it.

Too much data can be as paralyzing as too little. It presents so many options for personalization but doesn't automatically provide insights into what will move the needle most. Therefore, retailers don’t tap this rich resource as much as they should. Qualitative research tools can help retailers analyze the data and identify buckets of customers that offer the most promise. Describing these buckets in terms of personas is the next step to developing a direct mail personalization strategy that will engage, motivate and convert.

4. The cost is too high.

Cost is often a challenge for retailers that want to add more personalization to their direct mail. How do they cost effectively test which images, offers and formats will resonate best? Sequential A/B testing is both time consuming and expensive in a highly competitive industry. However, new virtual testing technologies have emerged that can help retailers rapidly test and learn what works best. Retailers shouldn’t be focused solely on paying the lowest cost for their print runs. A better metric is their cost per response.

According to Quad’s 2017 Customer Focus Survey, 59 percent of adults have read direct mail in the last seven days, which means 41 percent have not. With so much content coming at consumers from so many different directions, they may ask themselves, “Why should I read this piece of mail?” Personalization gives them that answer.

Debbie Seigenthaler is a senior marketing consultant at Quad/Graphics, a global marketing services provider.