Making Money with Direct Mail - A Playbook for Marketing Agencies

A marketing secret that may have been forgotten amidst all the digital ruckus is direct mail (DM). When exploited properly by a savvy agency, DM is a strategic game-changer that sets your firm apart from the competition and increases revenue. But some marketing agencies don’t include it as part of their regular services.

If your impression of direct mail is the old-fashioned bulk mail that requires specialized skills and super-long lead times to pull off, it’s time to get caught up with how mail works today. With the right tools and a little knowledge, agencies can execute powerful direct mail strategies, giving their clients an edge in a world that’s over-saturated with impersonal digital marketing.  

Ecosystems surrounding technology platforms is not a new concept.  As an example, according to IDC, HubSpot is estimated to generate $15.4 billion for its partners in 2024.  The Direct Mail automation market segment is on a similar path for both innovation and leverage of third-party expertise.

In this playbook, we will explore the many ways marketing agencies can use direct mail to grow their top-line revenue, attract new clients, and expand the services they offer to their existing clientele.

Why Direct Mail is Effective Today

Direct mail, despite being one of the oldest forms of marketing, remains a powerful tool in today’s digitally focused environment.

DM offers a personal, tactile experience that digital mediums simply can’t replicate. The physical act of opening an envelope and reading a letter or holding a postcard in one’s hands leaves a lasting impression. Physical marketing pieces delivered through the mail can create strong emotional connections between your clients and their target customers, boosting brand awareness and loyalty.

As the digital landscape becomes increasingly saturated and open rates continue to decline, direct mail stands out. Amid a sea of email promotions and social media campaigns, a well-designed direct mail piece can prove highly resonant, becoming a memorable standout experience.

Advancements in automation and Customer Relationship Management (CRM) integration now allow for the creation of advanced direct mail campaigns based on specific triggers. This means you can set up programs that allow your clients to create and send personalized mail to their customers based on their actions, behavior, and preferences. This targeted approach can drastically boost both customer engagement and return on investment.

Platforms like Postalytics make it easy to configure and execute direct mail campaigns, often in conjunction with complementary digital elements.

• Direct mail offers an unmatched personal experience.
• DM helps your client’s message stand out from the digital noise.
• Integration with CRM systems allows for highly targeted campaigns.
• New automation technology allows agencies to add direct mail services without hiring mailing experts.

According to research conducted by USPS and The Winterberry Group white paper (“DELIVERING PERFORMANCE DIRECT MAIL IN THE UNITED STATES 2023”), direct mail continues to play a prominent role in a U.S. marketing mix, otherwise increasingly dominated by digital channels, because of six overarching trends:

1. Brands have come to widely embrace the “omnichannel” philosophy, emphasizing the integration of all marketing channels, both digital and traditional, in a diverse media mix.
2. Marketers are increasingly prioritizing performance—the ability to achieve specific, incremental objectives with respect to customer acquisition, sales, and other outcomes—over other use cases.
3. Growing costs and challenges associated with the addressability of data-driven digital media are leading many marketers (and digitally native direct-to-consumer brands, in particular) to test alternate channels, such as direct mail, in support of their growth ambitions.
4. Improvements in the integration of data and creative content, coupled with the advent of less expensive and more capable marketing technologies, are allowing direct mailers to achieve long-promised value from on-demand production, personalization, trigger-driven programs, retargeting, and other innovations that capitalize on intent signals in the buying cycle.
5. The continued robust availability of licensable third-party data—backed by a mature, multifaceted supply chain—represents the foundation upon which brands responsibly orchestrate their direct mail programs at scale.
6. Seeking to manage the vast complexity inherent in modern marketing, brands are looking to media channels and supply chain partners that provide flexibility, scalability and the ability to adapt to changing needs rapidly.

Additionally, the research found:

• 45% of marketers say the most important use case direct mail fulfills is customer acquisition.
• 59% of marketers are taking steps to better integrate their use of direct mail with other channels.
• 53% of marketers are shifting to more personalized content over the next year.

As a marketing agency, you have the means to transform direct mail from a mere marketing add-on into a core component that adds depth and strength to your clients’ multi-touch campaigns. Now, let’s explore how to monetize direct mail for your agency.

Making Money with Direct Mail

Direct mail has a significant role to play in today’s marketing climate. Both new and veteran agencies can increase their revenue and competitiveness by including this service in their repertoire. Automated platforms make this effort easier than ever.

Direct mail helps distinguish your agency with a unique selling proposition, and it is a powerful tool for your own marketing purposes. Warm up cold leads and showcase your expertise in marrying traditional and digital marketing practices while attracting new leads, nurturing existing prospects, and expanding services for current clients.

Direct mail marketing ensures customer retention, increases the lifetime value of your clients, and opens avenues for upsell opportunities. This happens through customer retention programs, creating trigger-based mailing campaigns, and augmenting direct mail with digital campaigns. 

Let’s not forget the income derived from direct mail projects themselves. From the design phase to mailing list rental and production, every step creates a potential new revenue stream for your agency. 

A platform like Postalytics can streamline your direct mail initiatives. The program offers functionality to automate direct mail efforts, track response rates, and integrate with your current marketing tech stack. This invaluable support can ensure your direct mail campaigns are a resounding success, both for your agency and your clients. 

With a Postalytics Agency account, marketing agencies can also derive revenue from sub-account subscriptions and fees for Postalytics CRM integration. More revenue-producing opportunities may be associated with agency-provided CRM integration implementation services and campaign management. The Agency account allows for agency mark-up on mailing costs.

Capitalize on the opportunity that direct mail offers–monetize it to grow your agency while providing high-performing marketing solutions for your clients. Let the power of direct mail take your business to the next level.

Increase Lifetime Value (LTV)

One key to agency growth and stability is increasing the lifetime value of your clients. The beauty of direct mail lies not just in its ability to attract and engage customers but also in cementing their loyalty. This works the same for your clients and for your agency.

Adding direct mail to your agency’s repertoire isn’t simply adding another channel; it’s enriching your client’s entire marketing ecosystem. By harnessing the power of physical touchpoints, you cultivate stronger relationships with your clients and acquire valuable data for future campaigns.

As clients begin to see the results of their direct mail efforts, they are eager to expand the effort. For your agency, this means designing and managing increasingly sophisticated multi-channel campaigns. Clients may want to add elements such as retargeting or fulfillment to direct mail campaigns that began as simple batch mail distribution. More complexity equals higher agency fees.

Integration is another area ripe for expansion as your agency develops links and coordination with CRM and third-party data or other components of the marketing technology stack. When systems are tightly integrated, clients are more likely to continue working with your agency–the entity that built the system for them.

For your own marketing efforts, direct mail can be a medium for personalized messages aimed at your clients, contributing a human touch to your brand and influencing your clients’ perceptions. Everyone knows that mail costs money to produce and send. When clients receive personalized, tangible mail from you, they feel valued. This instills a sense of trust and makes clients likely to engage more often with your brand. The consistency of this engagement increases their lifetime value. 

But how do you achieve this? 

Here are three methods to enhance client lifetime value through direct mail: 

• Use Direct Mail for Customer Retention Programs: It’s much easier (and more cost-effective) to retain existing customers than to acquire new ones. Implement creative customer retention programs using direct mail. Surprise your customers with personalized offers, loyalty rewards, or even simple thank-you notes that show them you value their business.

Use direct mail from your agency to keep clients informed about trends, new offerings from your company, or investments you make to expand services. Let your own direct mail campaigns show clients how you can take their marketing campaigns to the next level.

• Create Trigger-Based Mailing Campaigns: Use your CRM system to set up trigger-based mailing campaigns. A well-configured CRM can inform you when a client hasn’t interacted with your brand in a while. These triggers can be an avenue to send out personalized postal mail, adding an extra touch point that reminds them of your brand. 

Interactive components like QR codes, personal URLs, or augmented reality can help you re-engage with past clients who have stopped opening your emails or SMS messages. Use interesting content delivered via the mail to reconnect via digital channels configured to win them back.

• Augment Direct Mail with Digital Campaigns: While we’ve been emphasizing direct mail, don’t forget about your digital presence. Combining direct mail with digital strategies can give you the leverage to extend the reach of your message while also creating more touchpoints with your clients.

For instance, a QR code on your direct mail pieces can lead your client to a personalized landing page, a product preview, or a special privilege pass. These efforts foster strong relationships and create more engaged customers – thus increasing their value over time. 

Any strategy that helps your agency stay top-of-mind with customers increases the chances of doing business with them again. Consistent awareness and reinforcement deter them from jumping to a competitor and encourage them to expand their relationship with you.

DM Projects: Generating Revenue Opportunities

A range of services are necessary to design and execute direct mail strategies, and all are billable. Strategy and planning, copywriting and design, list research and purchase/rental, digital and social integration, and back-end tracking and analysis are all services your agency may package together or sell á la carte. Direct mail isn’t just about printing and mailing, which marketing agencies rarely do themselves. The real opportunity lies in the value agencies can bring as they furnish the elements necessary for success and oversee the campaigns.

Margin from Direct Mail Production

Whether you use a platform like Postalytics or pursue the older, manual methods of direct mail production, your agency will serve as the entity responsible for scheduling, coordination, and oversight. Your agency serves as the central data collection and reporting facility for your clients’ direct mail projects. Contract with all the service providers (outside designers and writers, list vendors, printers, and mailing service companies), mark up their prices and add fees for agency oversight. 

Agencies can increase revenue per client by offering automated direct mail that perfectly complements digital, email, CRM branding, and strategic marketing practices.

Add a margin percentage per mailpiece into Postalytics’ Agency Edition and watch your bank account grow each and every time you send a campaign for your clients.

Postalytics offers an Agency Edition that allows you to take advantage of our lowest per-piece costs. Agencies make a commission on each individual mail piece Postalytics processes for your clients. The Agency Edition also provides a white-label interface, allowing your clients to access parts of Postalytics directly to view your agency-branded mail tracking reports.

Postalytics places no limit on the number of accounts agencies can manage through the Postalytics Agency Edition. Use the platform to set up an account for your own marketing purposes and configure industry-focused demo accounts you can use to showcase the power of automated direct mail to your clients.

Subscription Royalties

Agencies can package the direct mail services powered by Postalytics and charge clients subscription fees that allow them to access agency-branded tools and reports.

Campaign Management

Charge clients for the tasks you handle for them as you coordinate campaigns. Billable services might include strategic planning, timing, A/B testing, and offer design.

Lead Magnets

Think of lead magnets as crucial aids in building a robust direct mail strategy. They’re the attractive bait – a free item or service that lures potential clients into your marketing funnel. Once the DM-driven action establishes a connection, you gain valuable insight into your audience, which is handy for future marketing initiatives that you will also design and deploy on behalf of your clients. 

Here are some ways agencies can generate revenue by handling lead magnets connected to direct mail campaigns:

• Creating Content: Craft engaging content based on billable market research you have done. Successful content depends on knowing what your targeted audience wants. Offer your clients straightforward, easy-to-understand writing that offers fast, solid solutions to challenges faced by your client’s potential customers.
• Designing the Magnet: A successful lead magnet is visually appealing. This typically requires contributions from your agency’s skilled graphic designers.
• Magnet Distribution: A direct mail postcard or letter will advertise the benefits of the lead magnet. Prospects can access the lead magnet by visiting a landing page and volunteering contact information. Postalytics will take care of the distribution tasks, the cost of which you will mark up on your client invoices.
• Fulfillment/Follow-up: Following up with a prospect that takes advantage of your client’s direct mail offer is essential. With physical items like promotional swag or product samples, agencies can coordinate with fulfillment houses. Your agency can bill for finding and vetting fulfillment service providers, setting up mechanisms to send the service provider prospect contact information, designing/executing follow-up email or SMS drip campaigns, and scoring leads.

Lead magnets you add to complement direct mail services can boost your clients’ outcomes while positioning your agency as a comprehensive and tactical marketing partner. It’s all about supplying business answers that speed up results, not just selling a product or service. Asking your clients to pay for your expertise in creating potent lead magnets becomes yet another way to generate revenue from your direct mail services.

Integrations

Postalytics can be extended via robust API’s to connect to tangential technologies that agencies can use to further enhance the direct mail experience and orchestration for their clients. 

Examples of this concept include integrations with artificial intelligence platforms, re-targeting solutions, dashboarding utilities, CRM systems, marketing automation platforms, and more.

Creative Services for Mail Piece Design

Mail copywriting and design is a critical step in direct mail marketing. This is where your agency’s creativity truly shines, helping clients create targeted, memorable, and impactful mail pieces that resonate within their target audience.

Creating pieces for print includes some details not encountered by digital-only copywriters and designers. Mail pieces must meet certain requirements to avoid excessive costs like USPS surcharges. However, your agency may not have writers and designers on staff–and you may not want the responsibility (and headaches) of finding and managing freelancers. Postalytics takes care of ensuring designs meet all the requirements. The platform will not allow you to approve proofs unless they comply with all standards and regulations.

The fees for mail piece design include copywriting, design, and all the proofing. Some marketing agencies might also incorporate market testing that includes running a smaller, targeted campaign to gather performance data and optimizing the final design.

Landing Page Design

Create an amazing user experience with a well-designed landing page. The importance of your client’s website landing page cannot be overstated. It’s the first digital touchpoint for potential customers directed from the call-to-action in your direct mail campaigns. More than just a destination, the landing page plays a vital role in converting these visitors into active leads, or even better, sales. 

Landing pages must be easy to navigate. They should mimic the branding, messaging, and offer described in the mail piece.

Here are some agency activities associated with fees you are able to charge for landing pages:

• Personalization – Use personalized URLs (pURLs) printed as text on the direct mail piece or encoded in QR codes to drive personalized landing pages. Personalization can include the customer’s name, but can also feature other details such as the customer’s purchase history, last donation, membership level privileges, etc. If landing pages include forms, pre-populate them with customer data already on file so they are more convenient and easier to complete. The less friction required to engage with your client’s brand, the greater the chance of customer conversion.
• Testing – Create multiple versions of landing pages and run tests to see which designs perform best. Vary the artwork, images, level of personalization, offers, colors, etc.
• Tracking – Using pURLs as part of your direct mail campaign enables you to track customer response. If you are unfamiliar with pURLs (included at no charge with all Postalytics campaigns), here is a good overview.
• Follow-up – Clearly, a customer driven to a landing page from a direct mail piece warrants follow-up activity. The degree of follow-up varies by application. Agencies can charge for email drip campaigns, design and fulfillment of physical or digital rewards, or updating CRM records.

Your clients should consider time spent on landing page design as a key aspect of your direct mail services. It is the bridge between physical direct mail and the digital realm, which helps augment the overall marketing strategy. Ensuring landing pages align perfectly with the branding and campaign messages in direct mail provides a seamless transition between physical and digital channels. 

Mailing List Rentals/Purchases

If your clients don’t have a mailing list, your agency can help develop selection criteria and facilitate list acquisition. Clients may ask you to assist them in creating buyer profiles that define the demographic and psychographic details necessary to request lists of the most likely buyers.

Revenue opportunities related to mailing lists include consulting/analysis fees, fees to segment the list or cross-reference with internal data sources, and markup on list rentals/purchases.

Check out this article that describes the steps associated with acquiring and using mailing lists.

Attract More Clients

A Direct Mail as a Service (DMaaS) offering differentiates your agency from the competition. With an automated platform, you can offer new direct mail options and opportunities such as small batch mailings or triggered messaging. These benefits are not usually available to companies still pursuing classic direct mail methods. Doing things differently helps your firm attract attention from potential clients who seek a more holistic and modern approach to marketing.

Show prospective and current clients your agency can help them take advantage of all marketing channels, not just the same digital choices advocated by all your competitors.

DM As a Unique Selling Proposition (USP)

When looking for a way to stand out from the competition in today’s digital-centric marketing environment, offering direct mail services can be the USP that gets your agency noticed. Most agencies focus primarily on digital strategies, leaving a gap in the market for DM. By offering this service, your agency can appeal to a wider audience and attract clients who are looking for a complete, diversified marketing package.

Do not underestimate the value of talking with your clients about direct mail and educating them on how mail can be targeted, personalized, and tracked. As they interview marketing agencies, companies will hear lots of pitches that talk about SEO, SEM, social media, and email. A firm that adds direct mail to the conversation will distinguish itself from the others.

Turning Your Cold Client Leads Warm with DM

Show prospects you believe in the power of direct mail by using it yourself. What better way to begin a conversation about adding direct mail to a marketing campaign than starting with your own mail pieces the customers hold in their hands? 

DM is an excellent tool for turning your agency’s cold leads into warm prospects. Integrate personalized direct mail into your own outreach effort. With client data from your CRM, you can customize DM pieces to capitalize on each prospect’s interests or reference previous interactions with your agency.

Showcase Your Marketing Savvy

Most marketing agencies think direct mail is too hard. They are confused by mail piece design requirements, postal rates, ancillary services, delivery standards, and postal regulations. 

Fortunately, Postalytics’ Agency Edition shields you from all those details. We take care of the postal issues. Our online design software ensures compliance with USPS and Canada Post mail piece design guidelines. Our network of print/mail specialists handles the printing, mailing preparation, and submission to the postal service.

Your agency can help your clients take advantage of the unique benefits direct mail can offer your clients without spending years accumulating specific postal knowledge and experience. You can concentrate on campaign strategy and planning and let Postalytics handle the logistical details.

A direct mail component within your own marketing allows your agency to show clients you know how to develop comprehensive multichannel campaigns. Unlike digital-only agencies, your firm can show how mail works with digital channels to achieve client objectives. DM doesn’t replace digital campaigns but enhances them, acting as another touchpoint in your client’s customer journey. Agencies that concentrate on digital-only campaigns may be short-changing their clients by leaving out a channel that consistently delivers high conversion rates.

By leveraging the unique advantages of direct mail—high open rates, targeted reach, and personalization—you can demonstrate your agency’s ability to create more effective campaigns and attract more businesses to your agency. 

Upsell and Cross-Sell Existing Clients

Existing clients already trust your expertise, appreciate your work, and invest in your services. However, opportunities to increase their spending always exist if you can offer more value. Direct mail offers an opportunity to tap into new sources of revenue with your existing clients already working with you on other marketing projects. 

Companies are seeking a fresh, tactile way to engage and re-engage their audiences. The reemergence of direct mail in the digital economy offers both agencies and their clients an opportunity: adding DM to the mix to run more dynamic, integrated campaigns. This is where the upsell lies. Here’s how…

• Make the case for DM: Share statistics that show the effectiveness of DM in the current market. Highlight how a strong DM campaign can effectively drive brand engagement, particularly in localized markets. Here is a great article loaded with information and charts you can show your clients.
• Market expansion: Present DM as an avenue to reach off-the-grid consumers. These are potential customers outside the scope of a company’s digital effort. Mail is especially useful for reconnecting with customers who have ceased engaging via email and other digital channels.
• Increased ROI: Demonstrate to them how integrating digital marketing strategies with DM can boost campaign ROI. Showcase instances where trigger-based communication or personalized DM offers have yielded significant results. Use this handy direct mail campaign calculator to reinforce your point.

Once your clients are on board with the concept of DM, your agency is in a position to provide billable services, such as designing everything from postcards and letters to complete direct mail packages, creating landing pages, integrating CRM triggers, tracking, results analysis, and more. The key lies in creating competitive and value-added bundles that invariably lead to an upsell. 

Consider offering a pilot project where you execute a small-scale DM campaign for your clients. Once they see tangible results, they will be more likely to invest in a larger scale and long-term endeavor. 

By integrating DM with your clients’ digital campaigns, you’re not just upselling – you’re adding value to the service you offer. Not only does this strategy portray you as a versatile agency, but it also lays the foundation for a more personalized and engaging relationship between your clients and their customers.