Emails or Direct Mail? Which Works Best?

by Jon Scaccia August 6, 2024

Imagine you’re walking to your mailbox, and among the usual bills and flyers, you find a colorful brochure from your favorite beauty store. Later, while checking your emails, you see a message from the same store. Which one grabs your attention more? This simple scenario is at the heart of an intriguing research study that explores how retailers should use emails and direct mail to reach different types of customers effectively.

The Science of Marketing: What Works and Why

Modern retailers, especially those operating in multiple countries, face the challenge of deciding how to allocate their marketing budgets across various channels to different customer segments. Should they invest more in sending emails, which are relatively cheap, or in direct mail, which can be quite costly but more tangible? This study dives deep into these questions, examining how these marketing methods impact customer behavior and sales.

Emails vs. Direct Mail: The Basics

Emails are digital messages sent to a customer’s inbox. They’re quick, cost-effective, and can include links that lead directly to a store’s website.

Direct Mail involves sending physical items like brochures, catalogs, or postcards to a customer’s postal address. Though more expensive, direct mail can be more memorable due to its physical presence.

The Research Approach: A Closer Look

To understand these dynamics, researchers used a method called the Recency-Frequency-Monetary-Clumpiness (RFMC) model. This model helps classify customers into different value segments based on their purchase history. The segments include:

• Dormants: Customers who haven’t purchased in a long time.
• Prospects: Potential customers who have shown interest but haven’t made a purchase yet.
• Low, Medium, and High-Value Customers: Existing customers are segmented based on how recently and frequently they purchased and how much they spend.

The study analyzed data from an international beauty retailer and a US apparel retailer. It used hierarchical linear models to predict how different customer segments would respond to emails and direct mail. To validate its findings, it even conducted a field experiment with a beauty retailer in Italy.

Key Findings: Who Responds to What?

The study found that different types of customers respond differently to emails and direct mail. Here’s a breakdown of the main findings:

1. Direct Mail for New Customers: Direct mail is highly effective at attracting new customers, especially those who haven’t purchased from the store before. The tangible nature of direct mail grabs their attention and encourages them to visit the physical store.
2. Emails for Existing Customers: For current customers, emails are more effective. They already know the brand and appreciate the reminders and updates that emails provide. Emails drive sales both online and offline for these customers.
3. Mixing It Up: Combining emails and direct mail can be particularly effective for medium-value customers. This combination keeps the brand top-of-mind and can lead to increased sales.

Real-World Impact: Boosting Sales

The study’s recommendations on reallocating marketing resources had significant financial benefits. Implementing these suggestions could lead to a 13.5% revenue increase for the beauty retailer and a 9.3% revenue boost for the apparel retailer.

Why This Matters to You

As a consumer, this research explains why you might receive an email from your favorite store one day and a brochure the next. Retailers use these strategies to engage you based on your purchasing behavior. Understanding this can make you more aware of the subtle marketing tactics at play and how they aim to enhance your shopping experience.

Engage with Us!

What do you think about receiving emails versus direct mail from your favorite stores? Have you noticed a difference in your response to these marketing methods? Share your thoughts in the comments below!

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