For marketers and advertisers who rely heavily on direct mail to attract new customers, postal rate increases can significantly impact direct mail return on investment (ROI). As the United States Postal Service (USPS®) continues to raise rates, direct mail budgets may not go as far as they used to.

In USPS’s nearly 250-year history, postage prices have never increased so rapidly: The most recent rate increase in January 2024 is the third in 12 months, and another rate increase is predicted to happen in July. These higher-than-ever prices are expected to raise the cost of mailing services by approximately 5-6% overall.

Regardless of the increasing costs, it is still a good time to send mail as part of a marketing campaign. As postal costs increase, mail volume decreases. A drop in mail volume means that your target audience’s mailboxes are less cluttered—making it easier for your marketing materials to stand out.

To take advantage of the decreased volume and mitigate the effects of rising postal prices, marketers and advertisers should rely on high-quality data to offset the cost.

How Data Can Improve Direct Mail ROI

Using a mix of first-party and third-party data-based strategies will be the key to optimizing direct mail ROI now and in the future. Here are some ways to use data to support your direct mail marketing campaigns: 

Prioritize your first-party data: Having accurate customer data in your database is crucial for direct mail campaigns. With a well-established data hygiene routine in place, you can ensure you have your customers’ correct mailing addresses and can reach their mailboxes with your campaign. Accurate first-party data can limit the wasted resources that result from sending mail pieces to incorrect or outdated addresses.

Use segmentation and personalization: Audience segmentation can help you tailor your marketing messages to deliver content that’s highly relevant to your customers. The more relevant your content is, the more likely it will resonate with your audience. In fact, 64% of consumers are more likely to engage with personalized messaging than generic marketing.

Make decisions based on analytics and insights: Consider how customers have previously engaged with your campaigns. Customers who have not engaged with previous direct mail campaigns are not likely to respond to future mailings. Reaching contacts on channels where they have previously respondedwill help you make the most of your budget going forward.

Consider a third-party mailing list: If your database isn’t robust enough or you’ve exhausted your contact list, a third-party mailing list can help you expand your reach. A data provider can provide a mailing list based on factors like location and demographics, allowing you to reach new prospects who are more likely to respond to your direct mail campaign. 

Embrace the power of digital channels: Reaching the same audience across online and offline touchpoints can increase conversion rates by upwards of 65%, making omnichannel campaigns incredibly powerful. By targeting your direct mail audience on online channels, you can maximize your direct mail ROI and make prospects more likely to convert. 

Make Direct Mail Work Smarter, Not Harder

With postal rates on the rise, a data-driven approach is the key to making the most of your marketing budget. 

But, let’s face it: Most mid-market brands don’t have an internal data science team or room in their budget for the latest data modeling technologies. And, many marketing teams don’t know what to do with their excessive amounts of customer data, particularly when it comes to predicting customer behavior.

Working with a data provider, like Deep Sync, and prioritizing high-quality data and analytics in your direct mail strategy can improve your targeting, minimize wasted resources, maximize your direct mail ROI, and help offset postal price increases.

This article was originally published in the Association of National Advertisers’ Marketing Knowledge Center: “Using Data to Improve Direct Mail ROI“