Customer Retention and Loyalty with Direct Mail Marketing

When marketers think about direct mail, their focus is almost always on brand awareness and lead acquisition, overlooking an essential part of the business — customer loyalty and retention.

That makes sense. Direct mail is a fantastic channel for those activities. Why? Consumers accept and trust the mail more than any digital alternative you might deploy. This makes the mail an ideal way to introduce a product or a brand to a targeted market.

Direct mail has many advantages for top-of-the-funnel activities, but what about mail for retention and loyalty programs? Does direct mail have a role to play in maintaining and enriching customer relationships?

At Postalytics, we say, yes, it does! Direct mail is effective for retention and loyalty communications for three reasons: personalization, relevance, and timing.

Personalization in Direct Mail Retention and Loyalty

Marketers understand that personalization drives response. Studies show that even simple personalization can boost the conversion rates of direct mail marketing pieces. When sending direct mail to prospects, marketers acquire data points they use to personalize their messages. They look for sources that can append demographic information like age, sex, and income to name and address lists.

Once you do business with an individual, though, your stockpile of personal data increases dramatically. You know what products they bought when the transaction took place and what channel the customer used to place their order. Your own data tells you how long someone has been a customer, how many orders they’ve placed, and the average value of each order. 

Depending on your business, you may have gained other useful information about the buyer and their household. Auto insurance companies, for instance, know about the cars their customers drive. New data-capture devices and apps that insurers are rolling out can even collect information about personal driving habits like speed, braking, and average trip distance.

Marketers can use all this available data to craft their retention and loyalty messages. They need not rely solely on broad demographics to personalize their messages and prompt recipient action. By exploiting customer-specific data they already have, the offers and notices can be highly personalized and, therefore, highly effective.

A funny thing about personalization is that consumers will provide trusted entities with detailed information about themselves if the data are used to benefit them. Specific, personalized communications delivered via the mail improve the customer experience by communicating with them as individuals instead of as anonymous faces in the crowd.

Direct mail personalization can take many forms. The simplest personalization is explicit data substitution. This tactic changes a salutation from “Dear Customer” to “Dear Bob.” Marketers can do much with this method, including mentioning names, addresses, dates, account balances, etc. When you include this variable data in printed communications, it shows customers that the company has customized the message specifically for them.

Depending on the capabilities of the document composition engine, personalization can also be accomplished in subtler ways. Postalytics supports these methods too. You might vary an offer, for example, depending on variables such as buying history. A sporting goods store might offer a customer who purchased a set of golf clubs a discount on golf attire or accessories. A customer that bought a camping tent could save money on fishing poles and reels. Here, it’s unnecessary to list the past purchases explicitly in the mailpiece. Just offer customers something likely to be interesting to them.

Image alteration is another way to personalize direct mail without explicitly revealing the data. For example, postcards or letters might feature photos of college students, young families, or retirees, depending on the age and family status recorded in your CRM. Marketers commonly personalize mailpieces by dynamically featuring images based on race, sex, or geographic location.

Here’s an article that talks about variable data and explains how Postalytics does it for direct mail letters and postcards: Personalization – Variable Data.

Relevance – CRM Driven Marketing Pinpoints The Right Message

Although data sources can help marketers target the right prospects with attractive offers in lead acquisition mailings, they involve a certain degree of assumption. Once someone becomes a customer, much of that uncertainty evaporates. You now have a relationship with a customer that generates information you can use to communicate with them much more effectively.

Take B2B relationships, for instance. Suppose your company sells products and services to companies in all fifty US states in various industries. When COVID hit, it affected industries and regions in different ways. Some were declared essential services. They were super-busy and had to keep running. Others totally shut down for a while, and the pandemic forced many to re-invent themselves and do business differently.

At the same time, everyone’s email inboxes blew up with a slew of COVID-related communications. Direct mail emerged as a channel that allowed companies to cut through the clutter and ensure customers saw their important messages. Customer retention messaging became a priority. Nobody wanted to lose business because their company appeared indifferent about this unprecedented public health crisis’s impact on their customers. 

Communicating with a customer whose business was shut down the same way as one scrambling to meet sudden high demand would have been highly damaging. Hair salons, grocery stores, and hospitals had totally different needs. Regulations and mandates differed from state to state.

This is where relevance comes in. In a situation such as this, you can use the data in your CRM system to identify situations and compose letters that address issues appropriately. Acknowledge each customer’s plight and recognize their loyalty. Suggest mitigating strategies appropriate for their region or offer lenient financing terms to help them get through a tough time.

When customer retention is the goal, relevant direct mail based on data can make a difference.

Timing: The Right Message at the Right Time

A relevant, personalized message delivered at just the right time can have a huge impact on the success of direct mail campaigns. Sometimes, reliable triggers allow marketers to time their approach perfectly (see the case study for JM Sells Law). But for many businesses, the date a customer acquisition offer arrives in a prospect’s mailbox has little to do with an individual prospect’s circumstances. During lead acquisition, many businesses don’t know the best time to present an offer to a prospect who’s never done business with them.

For communicating with your customers, however, the reverse is true. Precisely timed direct mail is a powerful aspect of customer retention and loyalty campaigns. With customers, you generally have the data necessary to pinpoint the right time to mail. 

You do not perform personalized customer loyalty mailings in batch mode. Fortunately, Postalytics allows — even encourages — their customers to set up pre-programmed direct mail efforts triggered by indicators in your CRM system. Our platform allows companies to mail volumes as small as one piece at the same per-piece price as a mailing of thousands. The best time to send a customer retention mailpiece is different for every customer.

Timing for some customer retention and loyalty mailings is fairly straightforward. A customer’s birthday or the anniversary of their purchase, for example, is easy to recognize. Likewise are, mailing dates based on calculations for an event, such as when a warranty or service contract is about to expire.

Other timed mailings are connected to actions or events your CRM can recognize. You might send a mailpiece after a customer accumulates a certain number of interaction points earned over time by visiting web pages, following your company on social media, or downloading an ebook. A postcard that arrives shortly after a customer abandons items in an online shopping cart is another example of customer retention mail triggered by customer actions.

The possibilities for generating effective direct mail based on triggers are endless. Suppose you sell automatic swimming pool cleaners and your records show that, on average, the units need new wheel bearings after three years, new hoses every four years, and the belts and gears wear out in five years. Each of these intervals presents an opportunity to strengthen the customer relationship. Send a postcard that recommends customers check their units for wear at the proper time. Include a QR code or pURL linking to a personalized landing page that presents videos that show pool owners how to inspect their unit. Include a discount code for parts or furnish contact information for the nearest authorized repair center.

How does this improve customer retention or loyalty? Your proactive approach helps your customers avoid unexpected breakdowns and increases their investment in your product, which builds confidence and goodwill. Conversely, allowing your product to fail and leaving it up to the customer to decide how to react makes you vulnerable to the competition.

Here’s the story of a company that used direct mail to win back customers who had stopped buying: Ecommerce Direct Mail Case Study

Use Direct Mail’s Advantages

Don’t overlook the opportunities to retain customers and build loyalty with direct mail. By combining a flexible and affordable composition/distribution system like Postalytics with your customer data, you can impress an important asset — your present customers.

Digital channels are great, and we’re not recommending that anyone abandon them as a tool to communicate with customers, but electronic communications have their drawbacks. The average office worker receives 120 emails per day. Unsolicited text messages or communications via social media suffer from the same impediment; too much volume. When your customers decide which messages warrant their attention, they look for immediately beneficial communications. By their nature, customer retention messages aren’t all that urgent. Customers will ignore a good number of them.

The postal mail experience is completely different. Most consumers receive only two or three pieces of mail per day, and practically everyone scans their postal mail every single day. Your branded customer retention communications will be noticed. Plus, if your customers are among the 40 million consumers that subscribe to the USPS Informed Delivery service, they will see your mailpiece twice — once in their daily Informed Delivery digest and again when they retrieve their postal mail from the mailbox.

Note: Postalytics now offers custom envelopes that can display a branded call to action right on the front of the envelope! Images of these envelopes also appear in the Informed Delivery digest. Read more details about custom envelopes HERE.

Deliverability is another area where direct mail shines. If your customer changes their phone number, your text messages won’t get to them. The same thing happens when customers abandon email accounts or social media handles. You might think you are communicating with your customers, unaware that the messages are never seen. 

Postal addresses pinpoint a physical location, and we can verify they are correct before a mailing is even created. You can’t be sure an email addressed to suzeekitten94@gmail.com will be seen by your customer. But if you send her postal mail, the Postalytics system verifies her address meets USPS requirements. If she has moved and filed a change of address notice, we’ll correct the address and allow you to keep in touch with your customers.

Here’s an article that leads marketers through some of the details we handle for direct mail campaigns: USPS Direct Mail for Marketers. 

Companies sometimes choose the “easy” way to communicate with customers. They have automated systems that spew emails or text messages. Given the importance of customer retention and the value of loyal customers, adding postal mail to the strategy is a smart move. With systems like Postalytics, sending customer loyalty messages via direct mail is as easy as setting up an email campaign.