Like organizations in nearly every industry today, insurers are pushing for digital innovation as a means to improve customer acquisition and the customer experience. This focus is essential for future success, but a danger also lurks in this strategy.
With digital channels clearly proving their worth, marketers are in danger of overly focusing on the new communication channels, under-utilizing traditional means of communicating with customers such as direct mail, which recent research indicates is as effective as ever, if not more so.
Direct mail is still popular with every age group
A recent study by InfoTrends, a worldwide market research and strategic consulting firm, and co-sponsored by Prinova, reveals the continuing effectiveness of direct mail. The study, “Direct Marketing Production Printing and Value Added Services,” found that direct mail is being responded to at a high rate across every age group.
Perhaps particularly surprising to many is the strong response rate for those in the millennial generation, since this demographic is by far the most digitally connected we have seen. However, despite their digital connectedness, millennials reported that as a group they:
- Last responded to direct mail on average within 2.4 months, quicker than the average response time reported by all respondents, and
- Open the direct mail they receive at the same high rate of 66 percent as recipients overall.
Perhaps most important, 63 percent of millennials who responded to a direct mail piece within a three month period actually made a purchase.
A USPS study reached a similar conclusion about millennials’ interest in receiving political direct mail. Commenting on the study, USPS sales VP Cliff Rucker said, “As the much-coveted demographic of 18- to 24-year-olds has grown up with and around computers, focusing exclusively on digital channels seems like the obvious strategy. What we actually found was that millennials are far more likely than non-millennials to read and engage with direct mail, particularly political mail.”
Consumers open direct mail for a number of reasons, but interest in the products and services offered tops the list. Additionally, one quarter of those in the 25-34 year old age range opened direct mail because of the print and image quality and 25 percent of millennials consider reading direct mail a leisure activity. Personalization has a very strong influence on whether a recipient will open the direct mail they receive.
Additionally, recipients 65 or younger are more likely to prefer direct mail over email correspondence or consider direct mail and email to be equally preferable. Similarly, those under the age of 65 are more likely to take action in response to direct mail versus email or are equally likely to take action in response to either a direct mail or email communication. The value of a cross-media marketing approach is strongly supported by these results.
Key findings of the InfoTrends study
The InfoTrends research supports several key points about how direct mail influences consumer purchasing behaviors:
- All demographic groups—even millennials—frequently read direct mail
- A high percentage of those surveyed reported that they had responded to direct mail within the three months before the survey
- Direct mail drives both online and bricks and mortar traffic
- Direct mail continues to trigger sales
The research found that almost two-thirds of marketers are attempting to coordinate direct mail with other marketing activities, and a top goal is to improve data-driven personalization and relevant communications with direct mail. Nonetheless, a danger remains that insurance organizations may neglect direct mail in favor of the latest new digital channel.
Getting the most from direct mail
One important fact that the InfoTrends research revealed was that more than 37 percent of the data that marketers require for an effective direct mail campaign is controlled by IT, signaling the need to leverage customer communications management (CCM) technologies that can merge silos of critical data repositories.
Insurance organizations striving to make direct mail as effective as possible should make sure the CCM platform used to create the direct mail provides an intuitive interface for non-technical users to easily visualize and build out content and rules intended for each touchpoint. It should also enable a high degree of variability to provide consumers with information that is highly relevant and personalized to them.
The InfoTrends research demonstrates the need for marketers to integrate direct mail with today’s digital channels. With personalization, color and high quality printing, direct mail can make a powerful impact on all customer groups, even digitally-focused millennials.
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