Direct Mail and Fulfillment Services Information
Direct mail services generate and distribute printed materials for the purpose of soliciting business through the mail. Many organizations use direct mail advertisements in conjunction with email, online, and mobile platforms to create a broader marketing campaign. Fulfillment services provide facilities, equipment, and labor to package and ship the orders which may or may not have been generated by a direct mail campaign.
It is common for all kinds of organizations to use direct mail and fulfillment services to market to both consumers and other businesses. For-profit organizations of all sizes may use direct mail and fulfillment services to advertise new products or distribute coupons that will hopefully lead to an increase in sales, brand recognition, or stronger customer relations. Not-for-profit organizations often use direct mail and fulfillment services to collect donations, recruit volunteers, or educate the target audience in some way.
Every direct mail and fulfillment service provider is different, but most will offer similar core capabilities. Some clients choose to do their own graphic design, but many direct mail service providers also offer some type of creative service. Clients may be able to use the creative design expertise of their service provider to improve their response rate. A direct mail service company may also be able to help create a layout that meets specific postal regulations.
In addition to creative services, direct mail and fulfillment service companies often have sophisticated printing capabilities. Most direct mail and fulfillment services use industrial inkjet printers to print any number of mailers, postcards, envelopes, barcodes, and more. Printing time makes up a large portion of turnaround time, so it is important for direct mail shops to update and maintain their printing equipment regularly.
Some of the most valuable capabilities of direct mail and fulfillment services relate to data processing. Direct mail services often have databases of consumer information that can be manipulated to produce lists of prospective customers that meet the needs of just about any organization. Direct mail services can also help manage mailing lists provided by their clients by performing data entry, eliminating duplicate information, and standardizing address information. In the United States, many direct mail services are capable of validating mailing lists according to National Change of Address (NCOA) updates. Additionally, direct mail services may offer testing capabilities such as A/B testing to compare the success of one mailing over another.
Fulfillment services should generally have the same basic capabilities. When a fulfillment service provider receives an order, they should be able to count, inspect, label, and add it to warehouse management software. Next they should be able to store the order until it needs to be processed and shipped. Some fulfillment companies may be capable of additional services such as custom package assembly, sorting, mobile integration, online access and ordering, credit card processing, co-palletization, conventional shipping, drop shipping, and secure warehousing.
This video provides an example of the kind of machinery direct mail and fulfillment service providers use to insert bulk mailing material into envelopes.
Video credit: directmaintenanceltd / CC BY-SA 4.0
Direct mail is a popular, cost-effective advertising choice for organizations for several reasons. Direct mail allows organizations to target high-probability prospects while minimizing money wasted on marketing to uninterested prospects. Direct mail has lower initial investment costs than other forms of advertising like television and radio commercials, and in many countries, postal services offer discounted rates for bulk mailings.
Direct mail and fulfillment services handle all kinds of orders. They and their customers typically sign contracts that outline the specific services required for the job. Direct mail service providers take many variables into consideration when determining the cost of a direct mail project, such as the type and weight of the mailer, the printing color(s), and the method of postage.
Fulfillment service providers typically calculate costs per service. Most of the costs involved with order fulfillment will vary depending on the volume of the sale and other optional service selections (e.g. expedited shipping). Every fulfillment service charges differently, but some typical costs associated with order fulfillment are:
- Setup fees
- Storage fees
- Receiving / inventory management fees
- Pick and pack fees
- Order / weight handling fees
- Packaging fees
- Returns processing fees
- Account management / support fees
- Technology / reporting fees
- Other operational service fees
The Direct Mail Cycle
When an organization decides that it is time to send out a direct mail campaign, the direct mail service provider can help them throughout the process. If done correctly, a direct mail campaign should produce consistent results time after time.
Every direct mail campaign should have a purpose, so the first step in the direct mail cycle is to set reasonable objectives. There are many reasons why an organization might decide to use direct mail. Some common objectives for direct mail campaigns are:
- Increase sales
- Acquire leads
- Increase brand recognition
- Educate customers
- Strengthen customer relations
Reinforce buying decisions
When sending a direct mail campaign, success often depends on selecting the correct mailing list. Direct mail service providers usually have access to a vast supply of prospective customers, but not every prospect will be the right prospect for every mailing. For example, someone living in a warm climate is unlikely to be interested in a discount on a snowmobile.
To make the most of an organization's marketing budget, it is common to identify the characteristics that may make someone more likely to respond to a direct mail offer. Organizations and direct mail service providers will then use that information to create targeted mailing lists. Some common criteria to consider are:
- Spending habits
The next step in the direct mail cycle is creating the offer. With an objective and a target audience in mind, direct mail services can help customers develop attractive mailing offers to fit their needs. Most direct mail offers include a deal that explains what the customer will receive if he or she responds to the offer, and the company's preferred method of response such as by phone, email, personalized URL (PURL), quick response (QR) code, or online ordering. Some common types of direct mail offers are:
- Free trial
- Money-back guarantee
- Free gift
- Limited time
In most cases, the better the offer, the better the response rate, but countless other variables can affect the response rate. Testing different variables provides an opportunity for improvement. Direct mail service providers usually offer statistically valid testing for different mailing campaigns. They can help customers understand why mailing A was more successful than mailing B. Even slight changes to the mailer will often result in a change in the response rate, so it is beneficial to test different layouts, offers, and other variables to determine what works best.
Return on Investment
The fifth step in the direct mail cycle is measuring the return on investment. Direct mail service providers can help customers track sales generated from a specific mail campaign through the use of promotion codes, PURLs, or by simply tracking sales over a given period of time. The return on investment is simply the difference between the total cost of the project and the total gain from the mailing campaign.
Before selecting a direct mail and fulfillment service provider, consider their size and expertise. Smaller direct mail and fulfillment shops are a good choice for projects that need extra attention to detail, but they may not be able to handle extremely large orders in a timely manner. Larger shops can easily process large orders in a short amount of time, but may not give the extra attention that some projects need. Compare various direct mail and fulfillment service providers to get a better understanding of how they differ in the volume and capacity they can handle, their capabilities and specialties, and expected turnaround time.