Getting New Customers by Helping New Customers Get New Customers: The Case for Direct Mailings

Digitalization is lessening the need for print in the office, causing print volumes and associated revenues to decline. That means the office technology dealers who generate most of their revenue from selling print into the office need to find a way to make up for the lost revenue. Ironically, an excellent way to make up for that lost revenue is by selling print to those same office customers. After all, just because your office clients aren’t as reliant on print for the same processes they were in the past, that doesn’t mean they don’t need print for any processes.

Take direct mailing solutions, for example.

Even though digitalization allows businesses to do most things, like invoice processing or customer onboarding better, faster, and for less money than if paper was used, there are some facets of a business that just cannot be digitalized (or at least, fully digitalized). Sometimes the cost of digitalization isn’t worth the time and cost savings it creates. Sometimes rules and regulators get in the way of businesses effectively digitalizing. And in some cases, people just flat out prefer dealing with paper.

The latter is the case when it comes to direct marketing. Research shows that a blend of paper and digital marketing strategies tend to outperform digital-only approaches when it comes to attracting and converting customers. According to research from Postie, 73% of consumers prefer ordinary mail over other marketing channels. The company also claims that businesses that blend direct mailing into their overall marketing strategy can benefit from 20% more reach than Facebook and receive three times more engagement than email campaigns. And according to research from Modern Postcard, direct mail marketing has a response rate that is 6 times higher than mobile, email, social media, paid searches, and internet displays combined on average (around 3.5% compared to 0.6%).

Not only does paper tend to outperform direct digital marketing efforts, but it’s among the most cost effective to reach out to customers and yields the highest return on investment, too. The research from Modern Postcard found that the average cost per acquisition using direct mail marketing is $19 — a shade higher than mobile and social media (about $17 per acquisition) — and between 10% and 60% less expensive than direct search and internet display ads. The low cost is complemented by an attractive return on investment — 119% on average — outperforming SMS (102%) and email (93%).

In other words, direct mail marketing is a tried-and-true, cost-effective way for businesses to reach new customers and grow. By adding direct mail solutions to your portfolio, you can reframe the value that you can bring to the table with print. Instead of talking about how you can lower print costs or improve their invoice processing workflows, you can talk about how you can help increase sales by 20% in the next 12 months.

Replacing low-value volume with high-value volume

According to the USPS, marketing mail volume grew to 66.2 billion parcels in 2021 (an increase of 2.2 billion parcels compared to 2020), accounting for over 50% of all the mail that the USPS handles annually. There is little reason to expect that trend to reverse, given the efficacy of direct mail (there is a reason that marketing mail has made up about half of all mail volume for the past decade and beyond).

And of all those billions of parcels sent, a great many are on special substrates using expensive inks that can only be made on high-end devices. Don’t forget, this is marketing. These parcels are designed specifically to get someone’s attention and compel them to act. According to the USPS Direct Mail Report, marketers rely on a diverse range of mail formats in their direct mail campaigns. Newsletters and postcards were most popular (66%), followed by self-mailers (56%), catalogs (48%), and packages (45%). This creates an opportunity for dealers to sell production, wide-format, and package printing hardware to their office customers.

By bringing these tasks in-house, businesses can create short runs of personalized materials without paying a premium to a service provider. With greater control over the process, in-house direct mailing operations can also help businesses reduce mistakes by catching little problems that a third-party printer/mailer wouldn’t be able to pick up on their own, such as if a color in your logo is slightly darker than it should be. It also increases the amount of time that a business can spend planning their campaign, since jobs don’t have to be submitted ahead of time. In-house shops also have the added benefit of being able to make last-minute changes before printing.

The direct mail marketing opportunity

Direct mail marketing is an enormous market, with an estimated value of $74.65 billion in 2022, according to The Business Research Company. And yet, the market is still growing. The Business Research Company forecasts that the market will grow to $76.95 billion in 2023 and $84.72 billion by 2027.

The direct mailing solutions market provides dealers with several transactional and recurring revenue opportunities—either as a supplier, as a service provider, or as both—and drives print revenue as a side effect. Dealers can bundle high-end A3 and/or production, wide-format, and packaging printers, automatic postage meters and folder/inserters along with the print management and direct mailing solutions that underpin it, so customers can power their own direct mail operation. With each sale comes the potential for years of recurring subscriptions, consumables, services, and maintenance revenue. You can take this a step further and start partnering with CRM platform providers, and bill yourself as a one-stop-shop for sales and marketing automation—not just with print, but with a full portfolio of tools that every marketing department would need.

Similarly, you can learn how to use that hardware and software yourself and offer to run their direct mail operations for them—they give you the copy (or maybe even consult with your own in-house marketing whiz as an upsell), and you print and mail it.

Whichever way that you approach the opportunity, the pivot will bring more value to your business by allowing you to deliver more value to the market you play in. Customers will view you as much more than “just the people that we buy print from.” Instead, they’ll see you as the people who helped bring in new customers and grow sales by 20% last year.

Direct mailing is a logical fit for office equipment dealers

Launching a direct mail marketing business has limited risk and doesn’t require a lot of heavy lifting to get off the ground. Sales staff and technicians can be trained to sell, deploy, and maintain these solutions quickly, and dealers won’t have trouble finding a mailing solutions technology partner to help get the ball rolling. It’s something you can hit the ground running with; something you can sell into your existing base right away as well as to acquire new logos.

Most of the businesses that you’ve already built a relationship with have a need for and stand to gain from a direct mailing solution — be it by helping them to start their own direct mailing campaign, improving their existing approaches (reducing the cost, increasing efficiency, etc.), and/or helping them lower costs by bringing it in-house (or by outsourcing through you).

Conclusion

Just because the need for print in the office is declining, that doesn’t mean that your office customers don’t need print at all — they just need print for something different. It’s time to change the conversation and reframe the value that you bring to the table with your print products. Yes, print in the office is still necessary, and there is still plenty of money to be made as an office print services provider. However, we cannot deny the changing needs of customers. But instead of only talking about how you can solve back-office problems and free up IT budget by cutting print costs, the discussion can be about attracting more customers, increasing sales, and building a strong brand. By adding direct mailing equipment and software to your portfolio, not only does it diversify your portfolio with products that can have a meaningful impact on your customer’s top and bottom lines, but it also broadens the number of potential customers you can serve overall, enhances the overall value that you can bring to each account, and creates new opportunities to sell high-end print, packaging, and mailing hardware, supplies, and service into accounts where revenue has floundered due to digitalization. After all, virtually everything that ends up in the mail came from a printer. Why not own the entire process?

Michael B. Hannon
Managing Director at FP Mailing

Michael B. Hannon is an executive leader with extensive experience within the mailing equipment and financial services industries. Taking on the role of managing director in early 2020, he is responsible for all aspects of FP’s North American regional operations. Having moved up through the company, beginning in sales in 2007, he has a very hands-on, customer-centric and sales-focused approach. Gaining knowledge of the industry throughout his career, he has been able to develop and implement numerous processes and programs, like FP Finance and sales process automation, that have improved both sales and operations, leading to FP’s continuous growth in the region.