How to unlock direct mail’s potential

Paul Sumner explains how utility companies can use personalised direct mail in a multi-channel marketing strategy.

Branding has never been more important for utilities. They have to remain competitive in a world where it is easy to switch.

Building a relationship with existing customers requires a marketing strategy that encompasses proactive and effective communication. However, recent research from Ofgem shows that only 4 per cent of consumers had been contacted by their current energy provider, suggesting that these brands are missing a trick.

Until recently, there has been a debate pitting direct mail against direct email. However, Go Inspire Group’s randomised control trials (RCT) aimed to uncover which strategy achieves the highest scaling of net revenue: direct mail on its own, email as a standalone strategy or both combined.

The message, whether electronic or not, will also have to grab the recipient’s attention enough to generate at least one sale. In 2017, 43 per cent of utilities reportedly said they did basic or no channel personalisation, yet a reported 84 per cent consumers would be more likely to open a piece of mail if it is personalised.

So it is critical that utilities providers look at how direct mail can be optimised with personal customisation.

Today, almost every detail of direct mail can be personalised at a cost per print that is not far removed from traditional mass printing techniques. Traditional features such as individual name insertions and variable imagery and messaging can now be complemented by personalised barcodes or QR codes that trigger tailored offers, personalised offer periods based on loyalty profile, and even segmented event invitations that gather people of similar profile.

In the second Go Inspire RCT, the use of personalised creative imagery produced a 128 per cent uplift that varied between product categories from 72 to 197 per cent.

Go Inspire also found that increased design “vibrancy” of direct mail can generate a 20 per cent incremental revenue.

The results of the RCT show that even though response rates were not critically affected by personalised direct mail, it was the resulting behaviours that targeted direct mail achieved that stood out, as greater incremental spending was noticed across the board.

For utility marketers, it is clear that a smart strategy of combining personalised direct emails with targeted direct mail will help to foster customer loyalty in an industry where “easy switching” is the norm.