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Maximizing ROI with direct mail

We sat down with Kevin Gilligan, Chief Executive Officer at Structural Graphics and Red Paper Plane to talk all things direct mail. From traditional number tens to more innovative formats, Kevin and his team have seen and done it all, helping us create unique pieces that help our clients stand out and drive real and measurable ROI. 



Robert:      

Hi, it’s Rob Lehmann, Founder and Executive Creative Director at Crow Creative. As part of our series “Formulas for Success,” we're sitting down with Kevin Gilligan from Structural Graphics to talk direct mail.


Kevin, why don't you tell us a little about yourself and Structural Graphics before we get started?

 

Kevin:         

Yeah, absolutely — great to be here with you. I have over 25 years of experience in direct mail and direct marketing.

 

So, I've been doing this for quite some time. Structural Graphics has actually been around for close to 50 years. It was actually founded on the idea that children's pop-up books are the most engaging books that we always had when we were children, and we learn the most from them.

 

And the idea was, if we could bring that level of engagement and interaction to direct marketing, it could be a game changer, and here we are 50 years later, still relevant and still doing some amazing work, with some of the top brands in insurance, financial services, technology, pharmaceutical. So, it's been a great story and a great run for the company.

 

Robert:      

Yeah, I know we've worked with you on several projects as well, just trying to bring some unique formats to life and figure out different ways to engage your customers.


So in, in that, I mean, obviously that's all, that's quite a bit of experience. How have you seen the market shifting? What do you see, what are the trends currently shifting in direct mail?

 

Kevin:         

Yeah, I think you know, over the last few years, certainly, data has played a much bigger role in direct mail. You know, so much data is available, on our target audiences. So, we see customers, doing a lot more segmentation, a lot more persona building. They can certainly personalize the message, to those individuals.

 

And I think that's, you know, driving the performance of direct mail. I think the other thing we're starting to see is, is more customers doing that segmentation and spending more on those real high-value customers and prospects that they want to reach. It's worth it to invest more, and we see that shift, certainly in customers doing that.

 

But I think the other big change, particularly in the last, you know, two years, has been that real shift back to direct mail. I think, 5 or 6 years ago, that pendulum had swung really heavily toward the digital side of things. I think marketers are starting to see the success when you include direct mail, in some of those omnichannel campaigns that, oh, successfully drive because you're including direct mail. So, huge shift back to the popularity of direct mail.

 

Robert:      

Yeah, we're seeing that as well. I mean, it's interesting because I agree with you. I think direct mail kind of had its moment where everybody turned its back on it, other than the brands that had really seen its success. But what we're seeing is when you combine that direct and digital, you know, you're getting a 63% in response rates lift, you're getting a lift in clicks, and, more importantly, you're seeing a 49% lift in sales, which is fantastic.

 

You know, I think one of the big things spurring that, and I love your thoughts on this, is that trust, right? We're so used to now, in the digital environment, whenever you get something questioning: is this authentic? Is it true? But if the company’s investing in sending you a letter, you know, it's an authentic message from that company?

 

Kevin:          

Yeah. Absolutely agree. I think, you know, a couple of challenges marketers are facing right now — you know, first with email, you know, people aren't going to click on a link unless they trust the brand that's sending it to them. And having something that's tactile, that they're holding in their hand, really does build that trust.

 

I think direct mail is great for doing that. The other thing, you know, there's just so much out there in the digital space, you know, so many ads that we're bombarded with every day. And again, you know, breaking through that clutter and finding ways to get attention, get people online for more information and then retarget them, you know, with your digital ads and digital spend, I think, is a tactic a lot of marketers are using.

 

Robert:      

Agreed. And I mean, I know, I'm sure, like me, you've got that, that spam email account you use when you sign up for things. So, you know, they.. just that.. the validity in those email addresses you're getting — are you actually reaching a consumer? Because when you hit them at their home address, you know you're getting them. And, to your point, where we're not getting as much mail and it's becoming a lot more exciting when you do.

 

You know, it's funny because we see even Gen Z and Millennials are getting really engaged with direct mail, and a lot of that probably stems from the fact that they're just not used to it. Right? They never really got that personalized experience that we're able to deliver in the mail. So, I’ve got to ask the burning question, are number tens still the champion package? You know, that's traditionally been when you're sending out, a letter package will outperform or maybe a postcard. But is there a shift in the market now that we're seeing a lot of these younger users getting engaged with direct?

 

Kevin:          

Yeah, a few things. I mean, certainly the number of times and postcards, those traditional mailers, I still think, you know, play a big role. I think a few things that marketers are starting to do is include some, you know, unique folds, unique treatments on the pieces that are going into the number tens. I think, you know, the thing about direct mail, it's a great platform to tell a story. And we're seeing that shift where, you know, you don't want to be putting out heavy content. You know, a lot of verbiage. You know, marketers are using more visuals. And I think some of those unique folds, you know, that reveal information a little bit at a time, you know, can really help improve the effectiveness of a direct mail piece.

 

The other thing I think we're seeing from marketers is that shift from, you know, cost per unit, how much is each piece in the mail, you know, to the ROI, you know, what is this delivering for me? And they're willing to invest more if the ROI is there. And we're seeing again that big shift in focus away from just that steep CPU.

 

Robert:      

Yeah. And that's great. I mean, as you discussed earlier, segmentation can really open up doors there as well because you can start to segment out based on those high-value customers, sending them a more robust package and testing the waters with some of the lower value with a more traditional package.

 

You know, it's one of the things we always love about working with you guys is the innovative formats you do have, right? I, I remember the first time I saw the video mailer you guys do it. It's absolutely amazing, right? It's like a little tiny package, but it packs a big wallop. So, it's great to see that there are formats that are shaking things up and engaging that younger audience.

 

I mean, we do know, right? Those younger people are more willing to act. And I think getting a more robust package is probably adding to the shelf life. Are you seeing any results that indicate that the shelf life of direct has a greater impact on ROI?

 

Kevin:          

It definitely is. And, you know, back to the, the, the Gen Z. We just had a great case study from a university, that sent out a dimensional mailer. It was actually a mailer that mailed flat and then popped up into a mascot. And, you know, they saw a 25% increase in campus tours as a result of this, and a 38% increase in admissions and applications. That's the generation that is the digital generation. But they responded so well to direct mail.

 

We had another great customer that used one of our cube mailers. And this is a piece that mails flat. And when you open it, this dimensional piece pops up. Really engaging and fun but it sticks around. And this was an insurance customer that, typically, when they send a direct mail piece out, they see quotes, you know, for those first few days after it hits mailboxes, and then it drops off quickly. With this piece, because the cube is something that's designed to be kept, and an insurance decision is not an immediate decision, they saw quotes over a five- and six-week period. So that shelf life was absolutely there.

 

So, our dimensional print definitely has a longer shelf life and gets shown to others. So you're actually extending, you know, that brand and your message.

 

Robert:      

Yeah. I mean, it's interesting we've found with pieces we do in other marketing groups, when it does have that shareability, when it's got something that sits on your desk that people are going to come by, want to interact with, it can really help drive, like in the B2B market specifically, a lot of interaction.

 

And in the residential market, having that shelf life is great. I mean, you know, it says on average direct mail sits in the house for two weeks, is engaged with about five times each time. That's huge, right? You don't get that from an email. You read the email once. Maybe you keep it. You think you'll go back, but you never do, right?

 

So now it's interesting, right? Because now everyone's talking about the cookieless world, AI, all of these hot topics. But direct mail still seems to stand the test of time, right? You're building that first-party data, which is going to help you get past that cookie issue. And then, from an AI perspective, you know, I think there are certainly ways AI is helping us with cleaning lists, scrubbing lists, identifying segmentation. But I mean, I'm curious what your take is. How do you see AI playing a role in direct?

 

Kevin:          

Yeah, I think, you know, that's one of the things right now that I think marketers are struggling with is, you know, AI is a powerful tool, but there's a trust issue there, you know, computer-generated images. You're not quite sure if it's real or not real.

 

When you send somebody a direct mail piece, it is tangible, and they do trust it. And I think that's, you know, one of the things, you know, why it's being so powerful when included in campaigns that also include email and digital ads is because there's a trust factor there. And we are seeing more and more customers where they're using direct mail as that door opener because it can be very targeted.

 

You can use all the data you want to find the exact right audience and then use your digital tactics, your email, your paid social, you know, some of those other ads that you can do, as retargeting. First of all, it's going to lower your overall cost because those retargeting ads are less expensive, and there's going to be a lot more trust on the consumer side because they're holding something tangible.

 

Robert:      

Yeah, 100%. All right. So what is your current favorite format?

 

Kevin:          

Well, you mentioned video brochures. And you know that that is a fun one. And, you know, that's the piece where — you open it up and a video, plays. Pretty impressive. There's some amazing stats on that. We had a client - Dayton Children's Hospital - that sent out these video brochures to physicians to get them to refer patients to their hospital. Saw an 80% increase in referrals just because of those video brochures. So, yeah, that's a, that's a hot one.

 

The other one, because it's hard to choose one, is called a carousel mailer, which is a flap that then becomes dimensional. And this particular one actually included augmented reality tags. So you're bringing that experience to the print piece where it's telling a story, it sits on your desk, it's staying there longer, and you're engaging them, you know, with those digital tactics like augmented reality.

 

So, I'd say those are my two favorites these days.

 

Robert:      

Those are some solid choices. I know we worked with you guys on one of those carousel mailers for one of our clients, and it's just a beautiful piece. It's really, it was a fun way to tell a long story in short, digestible bites. So love that. I love it.

 

Kevin:          

That is the absolute key these days. I mean, the attention span that these audiences have is so short, so you have to find a way to grab their attention, which, you know, the type of work we do absolutely does that. And then the storytelling, you know, it's emotionally the sales and marketing process. You're tapping into emotions and, you know, digital ads are great at that because they're very visual. And when you can get that kind of emotion in a direct mail piece and then combine it with the power of digital, you've got a real winning campaign.

 

Robert:      

Absolutely. All right. Last question for you. What would you say are the three absolute must-haves for a successful direct mail campaign?

 

Kevin:          

The first, it's got to be an integrated campaign. You can't expect to do the one-and-done, and drive the results. You know, you've got to be multiple touches up to ten touches, you know, at least, and including direct mail along with your digital, those multiple touches, I think is a real key.

 

The other is the storytelling. You know, you've got to bring that emotion out, so when you're your content, don't try to say too much. You know, make sure that, you know, direct mail is great to grab that attention and then get them online to engage more with your digital content, where you can continue that story, and including things like near field communication tags, where you tap your phone and you’re launched into a digital platform. QR codes certainly have been, you know, really, important ways to drive, you know, call to actions.

 

And then I think the, the final thing is that segmentation and personalization.

 

If you, if you do those three things, you're going to have a dynamite campaign.

 

Robert:      

I love it. And of course, you got to partner with the right guys, like Structural Graphics, to get it done.

 

Excellent. Well, thank you so much, Kevin. This is a great conversation. Really appreciate it and look forward to continuing to work with you and help serve our clients.

 

Kevin:          

Yeah. Thanks for having me. This is great. Thank you.

 

Robert:      

Of course. You're welcome. Thank you.

 

 

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