There is no doubt that response rates have dived in the last ten years. But think about it – banks haven’t given up mailings for credit cards even when the market is now the toughest it has ever been. Women’s clothing catalogues are still as popular as ever, as are home improvement mailings.

The purpose of direct mail for publishers

Direct mail has a real purpose. For publishers, it is critical. Why? Because the publishing industry is in grave danger of being subsumed by online retailers who have no concerns about how a publisher survives, only about how they can sell their books.

Put your business in the hands of retailers and you say good bye to strategic direction and value-based profitability.

For publishers, direct mail is a crucial part of the mix because it gives a tangible link between publisher and reader. It develops and sustains brand. It acts as a data generator to enable discourse. It is also a driver of channels – even if the order goes elsewhere than directly back to you, the producer.

The key to using direct mail is to understand your aims, know what you are measuring, and grasping the cost/revenue facts that lie behind its successful use.

The financial returns of direct mail in publishing

Of course, the financials are very important – and the pressures are higher than ever. 10 years ago a 2% response would have been excellent for a newsletter and today marketers are talking about 0.1% - or lower.

Not so long ago I was achieving response rates of 10% for an annual legal publication; my colleague Janson Woodall was getting the same for a transport annual – how times have changed!

If we combine this with an average mailing cost of say £500 per thousand and a targeted mailing to 4000 prospects, you would need to recover £2000 to achieve breakeven. At a response rate of 0.1%, this means a requirement of 4 orders at a value of £500 each.

For newsletter publishers, publishing a newsletter in the £500 bracket, this is acceptable because renewal rates should grow that investment significantly in future years.

But for publishers of books or management reports, the prospect is less attractive. A management report, requiring an ROI of say 400%, would have to be priced at the £2000 per copy bracket!

For book publishers, publishing titles at prices as low as £5.00 and as high as, say, £30, the task is enormous. At the higher price, our book publisher would need to sell 66 units to break even or 270 to achieve an ROI of 400%.

That equates to a (difficult these days) response rate of 1.65% to break even or a frankly incredible response of 6.9% to achieve target ROI.

Why publishers should still invest in direct marketing

So is direct mail still worth doing? Clearly, publishers of high value management reports and subscription-based magazines and newsletters can continue to benefit from direct mail.

Direct mail for high value B2B publishers permits: sophisticated packs to describe value; the ability to override objections via demonstration; contextual marketing to push customer “hot buttons” and to give “ownership rehearsal” prior to ordering. Because these publishers charge high prices, DM is critical to make price irrelevant.

Direct mail for conventional book publishers is more problematic. These publishers should instead take a more holistic view of what they are trying to achieve. For these publishers, DM can achieve direct sales and must achieve reasonable volume but the tool also drives other activity: sales through online, trade, your own website, libraries and others.

For all publishers, direct mail hangs around longer in the customer’s premises – many pieces are hoarded for future reference. These direct mail pieces are critical to building your brand and for maintaining customer awareness of you and your unique selling points.

Measuring the effectiveness of direct marketing in publishing

For subscription-based products, it is still reasonably reliable to track response via orders into your business via business reply envelopes, white mail, phone and web orders. From here you can measure financial performance and calculate ROI.

In my experience of direct marketing cheaper books (i.e. books below £50), the task is more complicated because the consumer can go elsewhere following a prompt from you.

As well as the response channels which apply for subscription products, book buyers have other channels which might already command their brand loyalty: online sites (Play; Amazon etc); bookshops (high street and their websites); libraries etc

For these publishers, a pure assessment of campaign ROI will make for highly depressing reading. You need instead to look at the trading background in a period before your campaign (say 3 months) when no marketing was done and also check sales through other channels (book trade, overseas, library sales etc).

Then measure results through these channels in a six month period after your marketing has gone out. There are two caveats to this approach: firstly, make sure that you watch out for seasonal uplifts which may be nothing to do with your activity; secondly, remember that uplift through the trade carries the additional cost of the discounts taken off so account for revenue net of discount.

For book publishers though, the real benefit of direct mail is keeping in touch with your end readers. Fail to do this and your customers will look elsewhere and soon forget you.

Conclusion

Direct mail is expensive and relies on good lists to make it truly effective. For publishers of subscription-based products it offers a sophisticated way to sell complex, high-value services and reduce price objections.

For book publishers, it offers a tangible way for publishers to maintain contact with their customers and preserve their brand recognition. Measurement for all publishers should be based on an ROI assessment but for book publishers it is critical to keep track of sales uplift through other channels – remembering, of course, to net off the trade discount to arrive at a true ROI assessment.

The devil, as always, is in the detail!

Very best,

Michael Smith
Red Page Marketing

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