USPS Customer & Market Insights Image Align Right

We’ve said it all before — direct mail delivers, direct mail gets read, and it cuts through the clutter! In addition to backing previously reported data, the latest findings from a Mail Moments study further unveil how consumers respond to the mail they receive as well as their preferences about what is delivered to their mailboxes. Earlier this year, the USPS commissioned Summit Research to conduct an online survey that strove to understand mail behaviors and overall mail habits as they relate to billing. The findings reveal insights from over 1,500 consumers across a variety of age demographics that are involved with mail-related activities like mail sorting, shopping, or bill management. Some of the key findings are as follows:

• Overall mail engagement has increased since 2012, and Millennials are at least as engaged with the mail as non-Millennials.
• Regardless of age, most consumers get their mail at the first opportunity and also sort it at the first opportunity (usually the same day), confirming the high value of mail.
• Although they receive less mail overall, Millennials spend more time sorting their mail and are more active consumers of mail.
• The role of bills in the mail remains important to all generations—although Millennials are more comfortable with digital-only options.
• Nearly half of households consider pure online bill receipt and payment undesirable. As might be expected, however, this undesirability increases with age from just over a third of Millennials (34%) to over half of Boomers (54%).
• Even if there were an easy-to-use integrated billing portal, most consumers would still want some bills or statements sent via mail.

According to the survey, mail is preferred over telemarketing and e-mail communications and remains important to most households. Furthermore, many households would actually prefer to receive more mail instead of less. Respondents that felt this way reported that more mail can actually be productive for the sender—these individuals look forward to receiving mail, don’t see it as a chore, or would rather review physical mail instead of e-mail when seeking useful information.

The survey includes additional findings on behaviors that are broken down by age and the following behavioral categories:

• Sorters have a strong attachment to the mail. A sorter will categorize all of the mail that they receive and file important pieces for later use.
• Scanners have a lower attachment to the mail than Sorters. These individuals will occasionally discard pieces without reading them, but they still see value in the mail.
• Weak Habits have little attachment to the mail. This subgroup lacks basic mail consumption habits and does not see value in organizing mail.
• Skimmers are active detractors and have no attachment at all to the mail. Skimmers will pay attention only to items of extreme importance.

According to the findings from Mail Moments, the share of “Scanners” saw the greatest increase (23%) between 2012 and 2016, while the share of “Skimmers” saw the largest decline (16%).

Within the Mail Moments report, you will find much more information about how the mail preferences and behaviors of these groups are changing over time. Contrary to popular belief, the report confirms that mail is still highly valued among consumers. Regardless of age, most consumers get their mail at the first opportunity and also sort it as soon as they can. Click here to learn more about Scanners, Skimmers, and others as well as how to better meet consumers’ direct mail needs in 2017!

Source: Inno Media, 2012, Mail Moments Segments based off national survey of 1,078 heads of households.

Click here for the USPS Mail Moments 2016 Review pdf.

Earlier this year, we posted a blog on the reduced postage rate extended by the removal of the exigent surcharge of 2014. This surcharge was put into effect by the Postal Regulatory Commission (PRC) to help ease some of the financial hardships that were suffered in previous years by the United States Postal Service (USPS). Unfortunately for those who try to make the most of every penny, the time has come for new prices.

The USPS has filed notice with the PRC of the price changes for Mailing Services products to take effect next year, following the end of the holiday mailing season. If approved, the new prices include a two-cent increase in the cost of a First-Class Mail Forever stamp, bringing the price back to 49 cents. This was the cost of a Forever stamp before the Postal Service was forced to reduce prices by the PRC as part of the exigent surcharge removal.

The last price increase for stamps took place in January 2014, and the USPS claims that stamp prices have stayed consistent with the average annual rate of inflation since the Postal Service was formed in 1971. The only expected price change will be for First-Class mail (stamps and flats); there will be no change in prices for postcards, letters to international destinations, or additional ounces for letters. The proposal also includes a slight decrease in Metered First-Class Mail and an increase of 1.135% to Media Mail and Library Mail. Other proposed changes include a rebranding of “Standard Mail” to USPS Marketing Mail and price increases for special services like Certificate of Mailing, Collect on Delivery, Return Receipt, Registered Mail, and Signature Confirmation.

The Table below shows how First-Class Mail costs will be adjusted in the new year. These changes are expected to take effect on January 22, 2017.

Here are some tips for reducing costs in light of this proposed price increase:

• Understand the mailing products that are affected by this increase. Pricing for Standard Mail, Periodicals, Package Services, and Extra Services will also be adjusted in 2017. Please visit www.prc.gov for more information.
• Pick the right list and clean it up. Invest the time to target the right audience, use quality data that has been properly “scrubbed,” and format your mail to comply with the latest postal regulations to reduce postage cost and waste. To read more about lists, read Winning Direct Mail Campaigns Start With the List.
• Follow the USPS Postal Explorer for confirmed rates and other January 2017 pricing files at http://pe.usps.com. You can also visit USPS Service Alerts to subscribe to near-real-time announcements regarding disruptions or suspensions to domestic and/or international mail due to weather emergencies, natural disasters, and other events.

Today’s consumers are inundated with marketing-related messages. From print to e-mail to displays to push notifications on social media, marketers are fighting for consumer mindshare. According to a study conducted by Media Dynamics, Inc., consumers are exposed to a very substantial number of advertising impressions. At the same time, however, only a fraction of these messages actually get the consumer engaged. Consider the following statistics:

• Average number of advertisement and brand exposures per day per person: 5,000+
• Average number of “ads only” that we have some awareness of per day: 86
• Average number of “ads only” that actually make an impression (engagement): 12

Marketers realize that a “one size fits all” strategy won’t cut it anymore. They want to rise above the noise and create differentiated, customized communications that will help them stand out from their competitors. During its 2016 study on Document Outsourcing Services Expansion, market research firm, InfoTrends surveyed 250 North American Enterprises to better understand executives’ plans for breaking through the clutter. Over three-quarters of those surveyed stated that personalization was at the heart of building better customer communications.

Figure 1: How important is the delivery of more personalized print communications to your current strategic planning process?

The Personalization Gap

At the end of 2015, InfoTrends conducted a study entitled Micro to Mega: Trends in Business Communications. On average, enterprises were using three channels to communicate with their customers. When asked about the level of personalization, however, only about 28% of communications were personalized at the individual level (one-to-one).

Figure 2: What percentage of your external customer communications or marketing/advertising campaigns fit into the following categories?

In today’s market, segmented or mass communications are inadequate for meeting consumers’ expectations. Consumers are seeking offers that are relevant, appropriate, based on real-time actions, easy to respond to, timely, and consistent with communications across other channels.

Further, in 2015, InfoTrends surveyed 900 U.S. consumers in a study entitled Direct Marketing Production Printing & Value-Added Services: A Strategy for Growth. The responses from this research made it clear that personalization makes a difference in consumers’ willingness to engage with marketing communications. Unfortunately, there is a gap in frequency—although 84% of respondents indicated that they were more likely to look at a piece of direct mail that was personalized, only 27% felt that they were frequently receiving highly customized direct mail.

Figure 3: There’s a Gap in Frequency!

Building a strategy that is predicated on highly personalized communications can carry significant value for marketers and their organizations. In a survey of 1,000 U.S. adults entitled The Consumer Has Spoken, Ipsos Observer highlighted a number of marketing benefits to 1:1 communications:

• 61% of U.S. consumers feel more positive about a brand when marketing messages are personalized.
• 44% of consumers are less responsive to non-personalized or “mass-marketing” messages.
• 53% are more likely to purchase when a brand personalizes digital communications.
• 52% trust brands that enable consumers to share their marketing preferences more than brands that do not.

The Answer: Data-Driven Marketing

This personalization gap between marketers and consumers represents an important business opportunity for service providers. Marketers clearly acknowledge that they are falling short when it comes to delivering better, more relevant, and timely offers. They need to figure out how to use available data to drive business results. When asked about their key direct mail challenges, direct marketers cited data analytics (specifically predictive modeling, where the communication is focused on the next most likely purchase). These respondents were also challenged with building personalized campaigns from existing data, cleansing their data, and aggregating data from multiple channels.

Figure 4: How much of a challenge do each of the following represent for your direct mail efforts?

While service providers have historically been good at fundamental data processing capabilities (e.g., mailing list hygiene, NCOA processing, CASS certification/presorting, letter text setup with variable data programming, some custom programming/online proofing), the data game is changing. Savvy service providers are structuring new portfolios of capabilities to participate in a data-driven marketing opportunity with much higher margins. Businesses are investing in skills or establishing partnerships to build out a data-driven services portfolio that can help marketers bridge the personalization gap. It’s no longer only about the print associated with variable data-driven applications. Today’s emerging portfolios include:

• Data audits
• List management and purchasing
• Audience identification and scope
• Data mining
• Predictive modeling
• Primary and secondary research
• Attribution analysis
• ROI analysis

The Bottom Line

As we move closer to 2017, service providers will face yet another business evolution. The most profitable service providers will be able to properly define their role in bridging the personalization gap. You must work with clients to understand what data they have, what data they can obtain, or to organize their data, and most importantly how to activate their data to propel their businesses into the future.

Research continues to suggest that business expectations for paperless delivery adoption always exceed realized gains. Despite the efforts of bill and statement providers to move customers away from receiving paper-based communications, consumers still value the physical document as a hard copy archive as well as a reminder to pay. Americans received more than 26.6 billion household bills and statements last year. InfoTrends, a research firm that surveys and tracks how businesses print and mail communications, conducted its 2016 Transactional Communications and Payments State of the Market survey. According to the study, only 34% of bills and statements will be delivered as “paperless” this year. This may be because many consumers still like to receive their paper statements in the mailbox.

For credit cards specifically, a new survey from CreditCards.com found that nearly half of today’s 93 million credit card holders that are still receiving their statements on paper instead of online actually prefer it that way. This loyalty to paper statements is encouraging… hey, we’re an envelope company! What’s more, 46% of those who are receiving paper financial statements say they would pay to receive these mailings if they had to. According to the survey, a small credit and a discount coupon wouldn’t be enough incentive for most to switch. An account credit of $50 would be enough to tip a bare majority (52%) into switching.

Figure 1: Which of the following incentives would convince you to switch your financial documents from paper to e-statements?

Age is a factor that affects the preference for paper or digital financial statements. For example, although only 6% of consumers between the ages of 18 and 25 receive monthly credit card statements in the mail, the same is true for 36% of those aged 71 and older. According to InfoTrends’ research, 55% of those who receive their checking and debit card account statements online also receive paper copies, while 44% of those who receive credit card statements electronically also get paper statements. InfoTrends’ tracking shows the change in this “double dipping” behavior over the past few years.

Figure 2: Of the bills and statements that you access online, for what portion do you no longer receive paper versions?

There are a number of reasons that consumers are hanging on to paper. According to the respondents that InfoTrends surveyed, here are the top reasons for retaining paper statements:

• A reminder to pay (51%)
• As a back-up/archive (29%)
• They are easy to access and manage (25%)
• They’re convenient (24%)
• They’re free (23%)

Consistent with these findings, the CreditCards.com research found that while 67% of those getting mailed statements are just used to receiving the paper statements and like it that way, 50% say they pay their bills with checks and the mailed statements supply them with the payment envelopes. 80% like to keep the paper bills for their records and 74% use the paper statements as a reminder to pay their bills.

A 2016 National Consumer Law Center (NCLC) study on paper statements gives this old-fashioned payment method another endorsement. Based on this research, the practice of reviewing statements online is a major concern for the center because electronic statements are easy to overlook due to e-mail overload. The concern is that cardholders are missing out on important information such as the card’s interest rate and minimum payment information. Even worse, they might miss fraudulent charges or other suspicious activities. If consumers overlook online notifications and miss a payment, this can be harmful to their credit scores. Once again, these findings show that consumers value a physical mail piece as a record-keeping tool and a reminder to pay. Electronic statements create barriers for consumers to access vital information—consumers must set aside time to visit the correct webpage, recall their password, and download the document. According to the report, these steps take more effort than simply opening an envelope.

While banks, credit card companies, and other businesses are aggressively pushing consumers to receive their monthly statements electronically, research is showing that many consumers aren’t ready. Furthermore, moving to paperless statements can actually create more harm than good. Rather than going completely paperless, consider the advantages of “double dipping” and invest in ways to enhance your printed communications. The 2,000 consumers polled in InfoTrends’ research suggest these top 5 ways that businesses can improve their communications:

• Make them easier to understand
• Use color to emphasize important information
• Personalize the content
• Include informational/educational content
• Put multiple communications in a single envelope

In addition to these print-friendly suggestions, it’s important that you know your customers and their preferences. You must cater to their individual needs, whether it is paper, paperless, or a combination of both. Today’s market is more complex than ever before, and multi-channel communication will continue to be a growing demand for consumers of all ages.

The Household Diary Study, USPS 2015

http://www.infotrends.com/public/Content/Services/Brochures/TCP.pdf

CreditCards.com telephone survey, Princeton Survey Research Associates International June 2016

Although keeping up with industry news might seem to be just one more thing to add to your already long to-do list, the benefits of doing so can be significant for your business growth. Keeping tabs on the industry enables you to:

• Make better business decisions
• Spot threats and opportunities early for a competitive edge
• Understand critical market dynamics that shape your organization’s strategy
• Take advantage of sales and marketing opportunities that come your way
• Be viewed as an expert business partner
• Earn trust and respect from clients and prospects

Thankfully, each year, the Direct Marketing Association (DMA) compiles hundreds of relevant industry stats and facts for publication in its Statistical Fact Book. The publication culls stats from over 60 leading research sources and marketing experts. It covers a number of key topics, including marketing communications, spending allocations, response rates, and a variety of other trends. When dealing with marketing executives, you must continually focus on critical direct marketing trends so they can understand and address customers’ changing priorities. The DMA Statistical Fact Book is a great source of market insight, and you should take notice. Here are some key data points that were highlighted in the 2016 DMA Statistical Fact Book:

Direct Marketing is a Big Business… and Print is an Integral Component!

According to the Winterberry Group, “Direct and Digital” marketing spend was $153.2 billion in 2015. The printed direct mail component represented $46.8 billion of spend, up from $46 billion in 2014.

Figure 1: U.S. “Direct & Digital” Spending, 2015

Printed Direct Mail is Making a Comeback

Direct mail is experiencing a resurgence. According to the 2016 Fact Book, spending on direct mail increased even though volumes declined. Some of the explanations for this trend include postal rate increases and the increased use of more targeted direct mail where marketers invest in higher-quality pieces that are more personalized and relevant. Although these pieces are produced in lower quantities and often cost more, they usually deliver higher response rates. When used correctly, direct mail is an efficient and measurable complement to online counterparts. In today’s world, the new marketing mantra is that print and digital media work better together.

Data is Driving Marketing Success

The business world has moved into the era of data-driven marketing. Marketers are sorting through their customer data to create the most relevant campaigns possible. Regardless of marketing channel, the top priority in terms of data-driven marketing is delivering a personalized customer experience.

Figure 2: Most Important Objectives of a Data-Driven Marketing Strategy

The U.S. data-driven marketing economy employs nearly 1 million people, and the employment level rose 49% between 2012 and 2014. In addition, the value of the data-driven marketing industry has experienced a 35% growth in just two years, reaching $202 billion. According to the 2015 Cross-Channel Marketing Report from Econsultancy and Oracle, marketers are no longer focusing on managing data (collecting, cleansing, and applying). 44% of respondents report that they are investing in data management platforms, while another 33% are planning to do so. According to 23% of marketers, the challenge now is analyzing the data. Service providers of all types must assess their strategy for participation in today’s highly data-driven world.

e-Mail Must Be Used Strategically

Consumers want control over when and where they see e-mail messages. They are savvy with their inboxes and spam filter settings, and they aren’t shy when it comes to telling marketers about when and how often they want to be reached. 43.8% of consumers say that they want to hear from companies weekly. Meanwhile, 59% say that marketing e-mails influence their purchasing decisions and most of them seek offers such as free shipping or dollars/percentages off their purchases. Furthermore, personalized e-mails have proven to be an effective way to engage consumers and link with print for a fully integrated marketing campaign. There are a number of tools available that can help service providers deliver consistent messaging across multiple channels while blending direct mail and digital communications.

The Bottom Line: Make the Time!

The DMA 2016 Statistical Fact Book is full of useful information and trends pertaining to a variety of markets and media channels. Although it is only a single source of data, its trends and insights are pulled from the very latest research reports.

“The Value of Data 2015: Consequences for Insight, Innovation & Efficiency in the US Economy,” John Deighton, Harold M. Brierley, Professor of Business Administration, Harvard Business School and Peter A. Johnson, recent Adjunct Professor, Columbia University.

“The Value of Data 2015: Consequences for Insight, Innovation & Efficiency in the US Economy,” John Deighton, Harold M. Brierley, Professor of Business Administration, Harvard Business School and Peter A. Johnson, recent Adjunct Professor, Columbia University.

Econsultancy and Oracle, “Cross-Channel Marketing Report,” 2015.

Infogroup, “7 Key Insights into the Evolution of Data-Driven Marketing,” 2015.

BlueHornet, “Consumer Views of Email Marketing,” 2015.

BlueHornet, “Consumer Views of Email Marketing,” 2015.