Nerd Alert: The Psychology Behind Direct Mail Performance

Summary

Podcast Title: The Marketing Architects
Episode: Nerd Alert: The Psychology Behind Direct Mail Performance
Release Date: March 27, 2025

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Introduction

In this episode of The Marketing Architects, hosts Alina Jasper and Rob Demars delve into the intricate psychology that drives the performance of direct mail campaigns. Titled "Nerd Alert: The Psychology Behind Direct Mail Performance," the episode explores academic research to uncover what truly makes direct mail an effective marketing channel in today’s digital age.

Personal Anecdotes

Rob Demars opens the discussion by sharing his personal connection to direct mail. Growing up, his father was involved in the direct mail business, specifically printing mail-order catalogs. Rob remarks:

Rob Demars [01:08]: "I owe the food on the table growing up to direct mail. So it's very fond of my heart."

This personal insight sets the stage for a deeper exploration of direct mail's enduring relevance.

Study Overview: Effects of Mailing Design Characteristics on Direct Mail Campaign Performance

Alina introduces the focal study of the episode: “The Effects of Mailing Design Characteristics on Direct Mail Campaign Performance” by Sebastian Feld, Heiko Friendsen, Manfred Kraft, Kay Peters, and Peter C. Verhoff. The research analyzes 677 direct mail campaigns across two industries—nonprofits and financial services—focusing on two primary metrics:

1. Opening Rate: The percentage of recipients who open the envelope.
2. Keeping Rate: The percentage of recipients who keep the mail versus discarding it immediately.

Key Findings: Opening Rate

What Works:

1. Teasers with Questions on the Envelope: Teasers that pose questions significantly increase the likelihood of the envelope being opened.

   Alina Jasper [03:57]: "Teasers with questions on the envelope significantly increase open rates."

2. Heavier Envelopes (Over 20 Grams): Heavier envelopes appear more substantial and important, particularly resonating with recipients in the financial services sector.

   Alina Jasper [04:03]: "Heavier envelopes over 20 grams... probably because they feel important."

3. Envelopes Without a Sender's Name: Envelopes lacking a sender's name pique curiosity, especially in industries where unsolicited mail is common.

   Alina Jasper [04:10]: "Envelopes without a sender's name get opened more often, especially in financial services where people get curious about what's inside."

What Doesn't Work:

1. Colorful Envelopes: Contrary to intuition, bright and colorful envelopes actually deter recipients from opening the mail, as they are often associated with generic marketing materials.

   Alina Jasper [04:16]: "Colorful envelopes actually reduce open rates. People associate colorful mail with marketing."

2. Envelopes with Clearly Visible Postage Paid: Envelopes that prominently display postage paid perform worse in open rates compared to those with standard stamps.

   Alina Jasper [04:19]: "Envelopes that clearly show postage paid perform way worse than those that use a regular looking stamp."

Key Findings: Keeping Rate

What Works:

1. Including a Company Logo in the Letterhead: A recognizable brand logo in the letterhead enhances trust and increases the likelihood that recipients will keep the mail.

   Alina Jasper [04:39]: "Including a company logo in the letterhead increases keeping rates once people open the envelope."

2. Personalized Elements in Enclosed Materials: Personalization within the enclosed content, such as tailored brochures, encourages recipients to retain the mail for future reference.

   Alina Jasper [04:42]: "If the enclosed supplement, like a brochure, is personalized to the recipient, they're more likely to keep it."

3. Providing New or Unexpected Information in the Postscript: An engaging postscript that offers novel information can boost recipient engagement and retention of the mail.

   Alina Jasper [04:44]: "Providing new or unexpected information in the postscript boosts engagement."

What Doesn't Work:

1. Long Letters in Financial Services: Lengthy correspondence tends to be less effective in the financial sector, though it may perform better for nonprofits.

   Alina Jasper [04:47]: "Long letters and financial services... work better for nonprofits."

2. Requesting Immediate Signups: Direct calls to immediate action, such as filling out forms on the spot, discourage recipients from keeping the mail.

   Alina Jasper [04:49]: "Requesting immediate signups... backfires. People are less likely to keep a piece if it pressures them into an action."

Insights and Implications for Marketers

Alina emphasizes a crucial revelation from the study:

Alina Jasper [03:15]: "Opening a mailer doesn't guarantee someone will keep it or act on it. There's no correlation between open rate and keep rate."

This insight underscores the necessity for marketers to separately optimize for both opening and keeping the mail rather than assuming that increasing one will automatically enhance the other.

Personal Reflections and Examples

Rob shares his selective approach to opening mail:

Rob Demars [03:57]: "I probably open, like, 5% of the stuff that ends up in our mailbox. I screen it out pretty diligently..."

Alina contrasts her approach by admitting she opens almost all mail, highlighting different recipient behaviors.

Rob also recounts a memorable high-end direct mail experience from Mercedes:

Rob Demars [09:10]: "I remember getting one for Mercedes... it almost felt like I was getting a gift... very expensive way to stand out."

However, despite appreciating the effort, he admits it didn’t influence his purchasing decision.

Conclusion

The episode concludes with a metaphor likening direct mail to a first date, emphasizing the need for balance—creating enough intrigue to open the envelope while nurturing the relationship through the content without overwhelming the recipient.

Alina Jasper [07:37]: "Direct mail is like a first date. You need just enough intrigue to get someone interested in the envelope... the best approach is to be personal, provide value and make it easy to take the next step..."

The hosts reiterate the enduring potential of direct mail as a creative and impactful marketing channel, despite its challenges.

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Final Thoughts:
This episode of The Marketing Architects provides a nuanced understanding of the psychological factors that influence direct mail performance. By dissecting academic research and intertwining personal anecdotes, Alina Jasper and Rob Demars offer valuable insights for marketers seeking to optimize their direct mail campaigns for both higher engagement and retention rates.

Transcript

[Rob Demars]

Nerd Alert. Learning is important, right?

[Alina Jasper]

Yes, exactly. But a bunch of nerds.

[Rob Demars]

Nerd alert.

[Alina Jasper]

That's right. Marketing Architects. Hello and welcome to the Marketing Architects, a research first podcast dedicated to answering your toughest marketing questions. I'm Alina Jasper. I run the marketing team here at Marketing Architects, and I'm joined by my co host, Rob demars, the chief product architect of misfits and machines.

[Rob Demars]

Howdy.

[Alina Jasper]

We're back with your weekly Nerd Alert. Every week, I'll take a deep dive into academic marketing research and translate its complex ideas into simple, understandable language for Rob, and of course, for all of you. Are you ready to nerd out, Rob?

[Rob Demars]

Oh, it's time to turn up the dial on the nerdostat.

[Alina Jasper]

All right, let's get into it. As always, we'll link the research we cover in the episode notes. This week, I read a study titled the Effects of Mailing Design Characteristics on Direct Mail Campaign Performance. This is by Sebastian Feld, Heiko Friendsen, Manfred Kraft, Kay Peters, and Peter C. Verhoff. We are covering a topic that we haven't talked about on this podcast before, I don't think. Which is what makes direct mail effective, which I believe is still a very important channel for any marketer.

[Rob Demars]

I grew up with the benefit of direct mail. Being old, my father was in the direct mail business. He printed mail order catalogs. So I owe the food on the table growing up to direct mail. So it's very fond of my heart.

[Alina Jasper]

Shout out direct mail. So you should be an expert in this topic.

[Rob Demars]

I did.

[Alina Jasper]

It's in your blood.

[Rob Demars]

Yes, that's true.

[Alina Jasper]

All right, well, before we get too far into it, I wanted to ask you this. What is the last advertising direct mail piece you received that just really captured your attention?

[Rob Demars]

Oh, I had one that blew my mind. And it was a direct mail piece, and it was substantial in size, and it had a picture of my house on it. All right. And it was something to do with. They were trying to say, hey, here's an assessment of your home value and want to sell your house or whatever. But for them to. It's one thing to have, like, your address, like, printed on a piece of direct mail, but to actually have a photo of my home. And I knew that my neighbors all got the same one, so that I was like, okay, hats off, guys. That's a level of personalization I hadn't seen before in the physical direct mail channel.

[Alina Jasper]

And that didn't weird you out? How many angry calls do you think they got?

[Rob Demars]

I mean, it blew My mind, I little, I kept it because I'm like, hats off to you guys. This is. I, I loved it. I, I, that was fantastic. I would have been really impressed if I, if I would have scratched the photo and it smelled like my house, then I would have really been, you know, impressed. But that's still pretty good.

[Alina Jasper]

I don't know why that's gross. Now. That would be creepy. That would be creepy. But I agree with you. Personalization, like, we, we do some direct mail campaigns here, and that's, like, such a huge focus. It takes a lot longer. But you're right. I think it's so worth the impact if you could do it. Yes, I suppose for a purchase, like, I'm guessing whatever they were selling for your home, they would. It's a pretty big investment, so it's probably worth the customization. So direct mail, it still accounts for a huge portion of marketing budgets. But I want to talk about what design elements actually get people to open and engage with their mail. These researchers, they analyzed 677 direct mail campaigns across two industries, nonprofits and financial services. And they focused on two key metrics. The first was the opening rate. This is the percentage of recipients who open the envelope. And then the keeping rate. This is the percentage of those who keep the mail instead of tossing it right away. And the big surprise was opening a mailer doesn't guarantee someone will keep it or act on it. In fact, the study found no correlation between open rate and keep rate. Yeah. Which means marketers need to optimize these stages separately. So, Rob, let's say you open a piece of mail, which it sounds like most people do. What makes you decide to keep it instead of immediately tossing it? And do you open every mail piece you receive just automatically? You just open all of them?

[Rob Demars]

Yeah. So I don't actually, I would say I probably open, like, 5% of the stuff that ends up in our mailbox. And I screen it out pretty diligently, and I really open up things that look like it needs attention. You know, something that could either be a bill or require some sort of. Some sort of statement, or if it's something like an HBR magazine, you know, something with some heft. Because I like to make people in my house think I read stuff like that, even though I don't. I just like to leave it out. Hey, oh, look at dad reads smart things. But I really don't just.

[Alina Jasper]

Yeah, I'm sure that works really well for tricking your teenagers, for sure. Okay, interesting. I'm the opposite. I Open everything? Pretty much.

[Rob Demars]

Do you have one of those letter openers that just make sure you don't cut your fingers?

[Alina Jasper]

No, I would definitely cut my finger off if I had one of those. I do not know.

[Rob Demars]

But don't you cut your finger on all the envelopes when you're opening them? That always angers me. I get mad at the brand if I cut, give myself a paper cut.

[Alina Jasper]

All right. Pro tip. Don't give Rob paper cuts. Well, let's talk about what works and what doesn't for getting people to actually open direct mail. So here's what works. Teasers with questions on the envelope significantly increase open rates. Heavier envelopes over 20 grams, that might make Rob open your financial service envelope, probably because they feel important. And envelopes without a sender's name get opened more often, especially in financial services where people get curious about what's inside. But here's what does not work. Colorful envelopes actually reduce open rates. So you might think, oh, if I can make it bright eye catching, is that going to help? It seems people associate colorful mail with marketing. Oh no. And they ignore it. And envelopes that clearly show postage paid performs way worse than those that use a regular looking stamp. But keeping the mail is a different story. The study found including a company logo in the letterhead increases keeping rates once people open the envelope. A recognizable brand helps build trust. Personalized elements matter. If the enclosed supplement, like a brochure, is personalized to the recipient, they're more likely to keep it. And providing new or unexpected information in the postscript boosts engagement. What doesn't work are long letters and financial services. Those work better for nonprofits. And requesting immediate signups, like filling out an application form backfires. People are less likely to keep a piece if it pressures them into an action. So Rob, can you remember a time that you took an immediate action off a direct mail piece?

[Rob Demars]

No.

[Alina Jasper]

See? Hard to do, right?

[Rob Demars]

No, I, I, I literally don't. The only thing I've been creeped out at times like by those Post it note ones. You know where it's. It looks like some person wrote you a special little Post it note. Have you seen those? Do you ever get those?

[Alina Jasper]

No, I got one of those.

[Rob Demars]

You haven't. It's like a bulk mailer and they'll have like a post it note stuck on the inside of it with an additional message. And you're like, you're just now you just. Weird.

[Alina Jasper]

Yeah. You're also a marketer, so you like, I can tell like when people do the fake Handwriting. I'm like, this isn't handwriting. I know the font. Yeah, I know exactly. I've used that to send that to people to try to trick them. Yeah, I agree with you. I couldn't think of the last time that I opened a mail piece and responded to it, which makes me extra proud that I've gotten people to do that. So there you go. It's a big deal to get someone to open a mail piece and want to respond immediately. Which is probably why direct mail must have some of the similar problems of tv. Like, it probably helps with brand building, but people might not like, immediately respond to it.

[Rob Demars]

I still love it as a channel. I think it zigs on other zag. It's just it has so much creative opportunity to tell a story, but it's more challenging than it was back in the day.

[Alina Jasper]

Well, let's let the Rob GPT summarize this quick. Direct mail is like a first date. You need just enough intrigue to get someone interested the envelope. But what really matters is the conversation, what's inside. If you come on too strong, demanding too much too soon, people check out. The best approach is to be personal, provide value and make it easy to take the next step because no one wants to be asked to move in after the appetizers. ChatGPT is so funny.

[Rob Demars]

It's such a cool channel, but. But it's so hard. And you know, you think about open rates and with like email. What's a good open rate in email?

[Alina Jasper]

Oh, my God. I think it totally depends. It could be really low.

[Rob Demars]

Can be like below like 0.1%, right?

[Alina Jasper]

Oh, that's pretty like 5%. Yeah. I don't know.

[Rob Demars]

Yeah, well. Well, that's for a good open rate, right? So then you think about with direct mail, you know, if you're still getting a 2 to 5% open rate, like that's a lot of cost to manufacture all of those direct mail pieces having has to probably be for the right category and the right type of advertiser.

[Alina Jasper]

I do think some marketers have found tried and true direct mail pieces that can be produced fairly cheaply that they probably like. I would. I'm not surprised. Like nonprofit sending a letter. I'll bet there's some formulas people have found to get response and then you just keep running that. I think trying to build brand through direct mail is sort of fun to think about. What type of experience could you send someone where they're gonna. I'm guessing that direct response is probably more popular, but it's hard I guess to build brand with direct mail because it can become so expensive but right.

[Rob Demars]

Now and then you'll get those really high end pieces. Like I remember getting one for Mercedes once and I mean I'm not gonna buy a Mercedes but thanks for sending me it. And it was a really nice like it almost felt like I was getting a gift, you know and it's like okay, well that was an interesting way to stand out. Very expensive way to stand out. But it came in a box and it had, you know, beautiful catalog on the inside. I didn't buy it but it didn't work. I still prefer a wrangler.

[Alina Jasper]

That's it for this episode of the Marketing Architects. We'd like to thank Taylor Delos Reyes for producing the show. You can connect with us on LinkedIn and if you like the podcast please leave us a review. Now go forth and build great marketing Marketing Architects.