Since the mid-1980s when marketers discovered that email is a low cost and scalable way of marketing, businesses have asked the question: should I do email marketing or direct mail marketing?
Here are 3 reasons that is the wrong question to ask:
Most businesses ask their customers for an email address. They recognize that email marketing is low cost and effective. However, even with an active effort to get them, the average local service business has less than 30% of their customer’s email addresses. That means that the best your email marketing could ever do would still be ignoring over 70% of your customers.
When you send a commercial email to a prior customer, only 22% of them will open your email. That number might be even lower in your industry. Lets do some math on that… so if you have 30% of your customer’s email addresses (see #1 above) and only 22% of them ever see the email then only 6.6% of your customer’s will ever see your email. That means ignoring over 93% of your repeat business.
There are countless articles on the return-on-investment of email marketing. Let me save you some reading time: email marketing to your prior customers (see caveat at the end of this post) pays off big time. However, what is left unsaid in articles like this one is that the ROI on direct mail is still really good. Some numbers to illustrate my point: If I pointed to a machine that gave you $2,600 for every dollar you put into it but said you can only put a few hundred dollars into it every month, I am guessing that you would max out every month. That is email marketing. If I pointed to a machine next to it that gave you $27 for every dollar you put into it but said you can only put several thousand dollars per month into it, I am guessing you would still max it out every month. That is direct mail.
The direct mail machine reaches that 93% of your past customers that the email machine can’t.
More to come on this topic….
Caveat: There are, broadly speaking, 2 types of marketing: marketing for new customers and marketing for repeat customers. Marketing for “new customers” using email or mail is what is known as spam. Although sending unsolicited marketing (i.e. spam) can be effective in some circumstances, this blog post is focused on repeat customer marketing. I recognize that many local businesses want to focus on new customer marketing because they are convinced that they already capture all the the repeat business from their existing clients. However, after years of looking at hard data on this topic, I am convinced that the vast majority of local businesses are loosing way more repeat customer business than they suspect and that this represents the “lowest hanging fruit” to be picked from their revenue tree.