What’s in a Name? A Potential Decline in Response Rates

This article was featured in Mailing Systems Technology in April 2018. 

While the mailing industry has weathered, and sometimes embraced, many direct communication innovations over the years, direct mail is still the most influential marketing tactic, boasting significantly higher response rates than digital advertising alone. In fact, according to the DMA, direct mail sees a 5.1% response rate for house lists and 2.9% for prospect lists, while all digital counterparts combined only have a 2% response rate.

So, it goes without saying that any changes that could adversely affect direct mail response rates would be a sensitive subject for all mailers. That’s why when the USPS® proposed changing the name from Standard Mail (STD) to Marketing Mail (MKT) on the indicia of every mailpiece, there was serious trepidation from the industry. Fortunately, a few companies recently took the time to quantitatively test what this name change could mean for their response rates.

With encouragement from the Postal Service®, based on input from the Mailers Technical Advisory Committee (MTAC) work group, two major mailers – an insurance company and a large financial institution – conducted a study using an example of the new Marketing Mail indicia. What they found was concerning and seemed to validate fears from the industry:

• An 8.3% drop in response rates when the indicia displayed “MKT” (instead of STD) from the insurance mailing, and a 5% drop in response rates from the financial mailing
• A 10.9% drop in response rates when the indicia displayed “Marketing” (instead of STD) from the insurance mailing

So, what does this mean?

Simply put, this helps prove that consumers are looking at their mail; especially direct mail. It’s another figure to point to as an example of how the high-touch nature of direct mail supplemented with the high-tech of digital components creates the most effective campaigns. But, messing with the foundation of these campaigns causes disruptions that would impact thousands of companies.

What’s the path forward?

BCC Software is very sensitive to the entire mailing supply chain, especially the mail owners, and deeply understands how this proposed change can disrupt it. Which is why we are excited that Anita Pursley, an industry veteran, has joined our team. Anita deeply understands the position of the mail owners, having worked with many companies and organizations over the years.

“Although I believe the Postal Service’s intent is to entice new entrants into the direct mail arena, the name change appears to have disturbing, unintended consequences,” said Pursley. “Before any proposal becomes a requirement, I intend to work closely with the Postal Service and the industry, and to be the voice of the BCC Software customer.”

This meaningful drop in response rates begs the question, what is the future of the indicia? Is it even necessary anymore? With the innovations in the Intelligent Mail® barcode, it seems that an indicia could become a thing of the past, and this entire potential issue of changing the label of mail would be a moot point. Aside from a QR barcode, most consumers likely ignore the Intelligent Mail barcode and the data that is baked in it; data that is basically duplicated in the indicia.

As the USPS and the mailing industry continue to discuss the future of the indicia and the Intelligent Mail barcode, BCC Software will continue to stay involved. Our team of USPS® Mailpiece Design Certified professionals are readily available to assist our customers as we navigate these changes.

These conversations will undoubtedly continue throughout the industry, but it is clear based on this initial test, mailers will be hesitant to change the indicia on mailpieces unless or until it becomes mandatory.