The Top 50 Mailers

The more things change on Target Marketing's Top 50 Mailers list, the more they stay the same. As I write this, mail volume continues to plummet; the U.S. Postal Service reported a drop just shy of another billion pieces for the third quarter of its 2010 fiscal year. So with increasingly less First-Class and Standard Mail in circulation, what do consumers find in their mailboxes these days? According to this year's Top 50 Mailer list, it's more offers from nonprofits and publishers. While the nonprofit sector has always been dominant in the channel, it now carries more than half (52 percent) of our list of heavy mail users in the U.S. Publishers typically have walked almost hand-in-hand with their fundraising colleagues, but their 2009 marketing activities led to a 10-percent decrease in representation on the list—putting them at 32 percent. The remaining 16 percent is a smattering of insurance, financial services, food, merchandise, business services and even consumer packaged goods firms. Cracking the Top 50 Mailers list for the first time is Procter & Gamble, which might be living up to the second half of its name depending on how it's using direct mail. The channel is not the most cost-efficient way to sell low-cost consumables, like mouthwash and potato chips. However, it could be used selectively to sample new products and encourage influencers to help promote them. In all, about 25 percent of the list rotated out from the 2009 analysis to the present one, compared to a 33 percent shift experienced between 2008 and 2009. Of that group, the most musical-chairs players came from the nonprofit sector, followed by merchandise and financial services. The latter sector has continued to fall out of love with direct mail, with just one bank—Citigroup—hanging on to a spot on the list. When a consumer is likely to be sorting through one nonprofit appeal or magazine subscription package after another, what can these direct mail users (as well as firms in other sectors) do to maintain their competitiveness? Fran Green, president of American List Counsel's SMART Data Solutions, points out that savvy marketers are leveraging PURLs, audience segmentation, timing, purchase history and other data-powered tactics. "It used to be that you had transactional, geographic and demographic data, and that's all," she explains. "Now, you can overlay activities a customer took on your website or social media influence and interests [to build a more complete picture for targeting]." Mary Ann Buoncristiano, American List Counsel's executive vice president, agrees, adding that because consumers are still spending less, the acquisition side of the business remains challenging. But where marketers can't afford to drop the ball is once they've acquired a customer. "You lose loyalty if you don't make your follow-up direct mail offers more relevant," she notes. World Wildlife FundAs iconic and classic as the little black dress, almost everyone recognizes the simply elegant black and white panda logo of the World Wildlife Fund (WWF). The panda graces bumper stickers, t-shirts, water bottles, and of course, the environmental conservation's direct mail. With a membership base of 1.3 million in the U.S. and almost 5 million worldwide, direct mail is a key touchpoint in a member's relationship with WWF. According to World Wildlife Fund's CMO Terry Macko, direct mail is the medium used to hold an ongoing dialogue with members, informing them how funds are being used and to obtain extra funding for initiatives as needed. And due to the nonprofit's success with direct mail, approximately 66 percent of its revenue comes through the channel. "Our [direct mail] success is driven by never being satisfied with our current results; it comes from a passion for results and a willingness to constantly test and refine," says Macko. "And it comes from being committed to making direct mail work over time, properly evaluating its impacts on lifetime revenue." WWF's direct mail strategy over the past few years has shifted to the use of predictive modeling to determine who the nonprofit mails, and online and offline media is integrated when it's logical. WWF sends renewals first by e-mail before sending a notice in the mail. Macko states, "Certain appeals will do much better when an e-mail and direct mail communicate the same message at the same time, lifting response rates to both. ... Certainly much more of our revenue is contributed online every year, but individuals look for information in many places, and direct mail is an important way to reach people. And direct mail is very often responsible for driving online transactions; the key is figuring out how to measure that effect." Habitat for HumanityFounded in 1976 by Millard and Linda Fuller, Habitat for Humanity is a nonprofit ecumenical Christian housing ministry with a hefty mission: eliminate homelessness and housing poverty. Despite the huge challenge, Habitat has constructed more than 350,000 houses globally, providing more than 1.75 million individuals with homes. Donations make such results possible, with approximately 25 percent coming in through direct mail. "Habitat has a well known housing program and brand. People understand our mission to provide affordable housing and that is something that they can support by responding to our direct mail pieces," says Tim Daugherty, senior director of direct marketing. He asserts that direct mail is Habitat for Humanity's "strongest direct response vehicle," but the nonprofit also explores opportunities available through digital channels that have similar ROI, shifting investments when appropriate. As for spending on direct mail, the nonprofit has seen it become more difficult. "Postage increases, increasing competition and rising costs of paper and materials all make the investments more challenging," Daugherty explains. "Direct mail is still alive and well, however. And while we continue to aggressively pursue other vehicles, until we can get the same scale and ROI as with direct mail, it will remain a large part of our fundraising efforts." Hearst MagazinesIf you've spent any time in line at the grocery store, then you've most certainly had some face-to-face time with some of Hearst Magazines' publications. From teen fashion mag Seventeen to sophisticated gentleman's lifestyle magazine Esquire—and titles such as Cosmopolitan, Popular Mechanics and House Beautiful sprinkled in between—Hearst is one of the largest monthly magazine publishers with 14 U.S. titles and almost 200 international editions. Along with putting magazines on newstands and subscriptions into the mailstream, Hearst also has a dedicated direct mail program that adds to the publisher's success. Annually, Hearst Magazines mails 125 million pieces of direct mail. "Our direct marketing programs generate close to 80 percent of Hearst's subscription sales and of that, our direct mail campaigns generate 70 percent of these subscriptions annually," says Senior Vice President of Consumer Marketing Liberta Abbondante. "Direct mail is a very significant component of our marketing plan." Abbondante credits the use of statistical analysis and multivariate testing with the channel's success, stating that "this has allowed us to test the most significant variables in thousands of unique combinations that would not have been cost effective with traditional A/B test methodology." This testing process allows Hearst to get solid creative into the market quickly. Abbondante also points to the publisher's strategy of leveraging customer data to deliver targeted, personalized experiences to customers and its role in generating positive return. As well as cultivating a strong direct mail program, Hearst has found success in integrating its direct mail campaigns with other media. "Through multichannel communications and optimized timing of the communication across channels, we have seen significant improvement in customer retention," states Abbondante. "We've also seen performance improve by integrating our campaigns with the Web. Using Web and e-mail channels has helped Hearst reduce the cost of customer retention and also provides our customers better and more efficient service." Consumers UnionWith a mission to provide consumers with a fair and just marketplace, Consumers Union (CU) was founded in 1936 when advertising first made a splash in mass media. The nonprofit aims to empower consumers to protect themselves from advertising hype and bad products, delivering impartial information—through publications such as Consumer Reports magazine and two newsletters Consumer Reports on Health and Consumer Reports Money Adviser—that is ad-free and backed up by extensive research and testing. Serving more than 4 million consumers, CU sees more than half of its revenue come in through the direct mail channel. According to CU Senior Director and CMO Jamie Darnow, the nonprofit's direct mail success can be attributed to "closed loop" marketing. "We use tightly controlled 'closed loop' marketing to ensure we are serving consumers most interested in our products and mission through the direct mail channel, while at the same time, steering away from consumers not interested in our products and services through the direct mail channel," he says. "This controls costs and eliminates the 'junk mail' stigma that plagues many direct mailers." Along with continual refinement of marketing strategy, testing protocols, formatting and messaging, Consumers Union also engages in integrated marketing to best serve its customers in their channels of choice. The closed loop marketing strategy CU employs with its direct mail is used with the nonprofit's online marketing as well, in an effort to avoid the dreaded spam label. With another potential postage increase on the horizon, does Consumers Union think it's becoming more difficult to justify direct mail spend versus other media? "No, our systems are geared for optimal performance across all channels," states Darnow. "When one channel is underperforming, we reallocate accordingly. Direct mail at CU has expanded and contracted in the past and will continue to be a critical component of our mission moving forward." The March of DimesEstablished in 1938 by President Franklin Delano Roosevelt, The March of Dimes was tapped with the challenge of saving the country's children from polio. Since then, the nonprofit's mission has grown to encompass the important task of improving the health of babies by preventing birth defects, premature birth and infant mortality. To do so, the nonprofit relies on its 27 million donors and direct mail, among its other direct response initiatives. Mailing more than 74 million pieces annually, the direct mail progam raises more than 21 percent of the nonprofit's donations, and in 2009 it brought in $44 million, states Carol Portale, senior vice president of CRM & Direct Response Fundraising for The March of Dimes. She credits direct mail with generating thousands of new donors annually, as well as retaining and reactivating exisiting and lapsed donors. The success of the The March of Dimes' direct mail strategy can be traced back to its focus on analytics and extensive testing. "We saw some really interesting results with multi-variant testing and leveraged those learnings to increase response and gift size," says Portale. "We've rolled with a 'dime package' (an upfront coin premium), which has helped as well." Integration has also played a key role in the success of The March of Dimes' direct mail. According to Portale, "We see marked increases in a constituent's overall giving behavior and long term value for multichannel donors. As the foundation finalizes the launch of the new Blackbaud CRM solution, as well as an enhanced interactive website, we are very excited about new possibilities." MethodologyTo create this list of the Top 50 Mailers, Target Marketing editors partnered with the analytical resources division of lists and data marketing firm ALC. The following data was weighted and indexed to create the list: • Who's Mailing What! Archive hits, composed of mail patterns for nearly 5,000 mailers over the course of 2009; • ALC competitive analysis, based on publicly available list usage and number of hits; and • ALC transactional history. The list is not ranked by mail volume, given that the index is a prediction of volume mailed, not verified counts from the companies. Most direct marketing organizations do not report such data, nor can annual sales be relied on as any indicator of volume mailed. Annual sales figures are used for ranking in the chart, however, to provide additional insight into the success of these leading users of direct mail in the U.S.

Performance Marketing

The Top 50 Mailers

Hallie Mummert

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Hallie Mummert