Is the Direct Mail Sector in trouble?
Whether the Direct Mail Sector is in trouble, is much debated within our industry, both by outside commentators, and those that make their living within it. Whilst I agree it is difficult for me to be subjective let’s take a dive into the facts and try to form an educated opinion.
Firstly, what do we mean by “in trouble”? Yes, there have been some notable casualties of late with the latest being the Anton group going into administration. Having had conversations with those within the industry, yes this was unexpected, however, the full facts of management decisions are yet to come to light and will, I suspect, yield some answers. Sadly, as at the time of writing this piece, the administrators were winding the company up with creditors losing everything they were owed.
Are we “in trouble” because of outside factors beyond our control? To a certain extent yes as we have little sway on paper or postage price increases for example. Allied to the raising of costs (such as the increase in minimum wage and pension arrangements) means that the Direct Mail sector does become more and more expensive compared to online channels such as email and therefore margins are squeezed.
Online communications also have one big advantage – instant analytics!
Size is a factor in the recent downfall of some businesses such as the Anton Group. Small to medium size businesses are more agile both in reacting to demand, as well as diversifying into other areas of communication such as online communications and e-publishing. Consolidation will be a big topic over the coming months and years. The trend will, we believe, go from the bigger companies snapping up smaller rivals to similar size companies joining forces in mergers and acquisitions.
Create the insight and fight the pessimism
However, with insight, it is possible to fight back against this wave of pessimism.
Direct Mail has had an issue for a number of years with people’s perception of how the environment is affected by the industry. However, the good folks over at Two Sides have debunked that argument of which we should shout louder about.
Further optimism comes in the form of data taken from some MarketReach analysis. For Marketers, the highlight finding is that 92% of mail recipients will act on what they consume from the mail medium. Further good news only goes to highlight the upward trend in the sector.
And lastly. General Data Protection Regulation (GDPR). We see an opportunity for the Direct Mail Sector with the advent in May 2018 of the new data laws covered by GDPR. If you are unfamiliar with these new laws, some of the best information can be found at the DMA website. This will restrict the way, in particular, digital marketing is conducted and the use of personal data. At the very least those operating digital communications will need to gain or regain more specific permissions from their customer, via a printed communication, so they can continue to engage with them. This presents Direct Mail suppliers the chance to capture more volume of work.
Plan and invest to reap the benefits
The old saying “fail to plan, plan to fail” is never truer than in business. Writing a business plan has some benefits including:
- forces you to think realistically, objectively and unemotionally about your business
- leads to questioning of past and future assumptions
- makes it easier to communicate planning objectives and strategies to bankers, partners, employees, financial backers and so on
- helps to ensure that all aspects of the plan are clear and integrated
- serves as a reference point when determining the effects of alternative courses of action on business operations
- allows you to identify any areas where you may need external assistance
- allows you to plan the growth of your business and associated capital requirements.
Many companies fail to write one yet the above benefits make it clear to do so would help! You can find many templates and resources on the Web to get you started.
From having a clear strategy, a business can then invest wisely, therefore, making the business more profitable and attractive to new clients. However, with big investments never underestimate the length of deployment or day to day distraction this could involve so ensure you account for this in your plan.
So in conclusion, with the right plan and foresight, along with, crucially the right staff, things look good for the Direct Mail industry.
The blog post was written by Wesley Dowding.
Romax Marketing & Distribution, a Greenwich-London based company, provides a wide range of services in Direct Marketing for B2B and B2C, Direct Mail, Data Management, Printing, Discount Postage and Membership Communication Services and Consultancy.
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