This article originally appeared in the March/April, 2018 issue of Mailing Systems Technology.
While the mailing industry has weathered, and sometimes embraced, many direct communication innovations over the years, direct mail is still the most influential marketing tactic, boasting significantly higher response rates than digital advertising alone. In fact, according to the DMA, direct mail sees a 5.1% response rate for house lists and 2.9% for prospect lists, while all digital counterparts combined only have a two percent response rate.
So, it goes without saying that any changes that could adversely affect direct mail response rates would be a sensitive subject for all mailers. That’s why when the USPS proposed changing the name from Standard Mail (STD) to Marketing Mail (MKT) on the indicia of every mail piece, there was serious trepidation from the industry. Fortunately, a few companies recently took the time to quantitatively test what this name change could mean for their response rates.
With encouragement from the Postal Service, based on input from the Mailers Technical Advisory Committee (MTAC) work group, two major mailers — an insurance company and a large financial institution — conducted a study using an example of the new Marketing Mail indicia. What they found was concerning and seemed to validate fears from the industry:
- An 8.3% drop in response rates when the indicia displayed “MKT” (instead of STD) from the insurance mailing, and a five percent drop in response rates from the financial mailing
- A 10.9% drop in response rates when the indicia displayed “Marketing” (instead of STD) from the insurance mailing
So, What Does This Mean?
Simply put, this helps prove that consumers are looking at their mail — especially direct mail. It’s another figure to point to as an example of how the high-touch nature of direct mail supplemented with the high-tech nature of digital components creates the most effective campaigns. But, messing with the foundation of these campaigns causes disruptions that would impact thousands of companies.
What’s the Path Forward?
This meaningful drop in response rates begs the question, what is the future of the indicia? Is it even necessary anymore? With the innovations in the Intelligent Mail barcode, it seems that an indicia could become a thing of the past, and this entire potential issue of changing the label of mail would be a moot point. Aside from a QR barcode, most consumers likely ignore the Intelligent Mail barcode and the data that is baked in it — data that is basically duplicated in the indicia.
As the USPS and the mailing industry continue to discuss the future of the indicia and the Intelligent Mail barcode, we will continue to stay involved. These conversations will undoubtedly continue throughout the industry, but it is clear based on this initial test, mailers will be hesitant to change the indicia on mail pieces unless or until it becomes mandatory.
Chris Lien is the president of BCC Software and has been active in the mailing industry for over 25 years. During that time, he authored several software solutions utilizing Mail.dat for electronic auditing, distribution and logistics planning, palletization, and electronic postage payment. He has been heavily involved in industry associations such as the Association for Postal Commerce, Alliance of Nonprofit Mailers, Idealliance, and has previously served as industry Chair of the Postmaster General’s Mailers Technical Advisory Committee (MTAC).