Marketers love direct mail — it’s the highest-ROI marketing channels, according to research from the Association of National Advertisers — but frequent United States Postal Service (USPS) price increases, including a new round of rate hikes this month, continue to be a major concern surrounding the channel. In this conversation, Dave Honan, Quad’s Chief Operating Officer and Executive Vice President, explains how innovation and mastery of logistics can help brands better target audiences, lift response rates and take advantage of postal discounts.
Q. What’s your big-picture take on the direct mail marketing landscape right now?
Dave Honan: Direct mail — physical mail — remains a really important part of omnichannel marketing campaigns, and postage represents the largest portion of marketing mail costs at over 60% of our customers’ costs. In addition, postal costs have been rising at a significant pace and represent one of the highest inflation rates of all products and services in the U.S. over the past four to five years. So, Quad has been focused on helping our clients offset those rising costs and find better ways to reach audiences and ultimately improve return on their marketing investment.
Q. Give us an example of how Quad is helping marketers get more bang for their direct mail buck, so to speak.
Dave Honan: Pre-market testing is a big one. Quad’s Accelerated Marketing Insights (AMI) enables marketers to do pre-market and virtual testing, which can speed time-to-market, reducing cost. The advanced analytics that come out of AMI mean that marketers can test direct mail pieces, pinpoint what resonates most with consumers ahead of launch and avoid costly in-market correction.
Household addressability is another big one. Quad is one of the USPS’s biggest customers, which means that we have unrivaled understanding of the literal consumer household. Our proprietary data stack covers over 250 million consumers across more than 121 million U.S. households. We can help marketers understand a wide range of data points about their target audiences across demographic, transactional, attitudinal and behavior attributes, including what we call consumer “passions” — from home improvement and lawn & garden to baking and books.
Q. Can you explain a bit more specifically how Quad helps marketers save money on direct mail campaigns?
Dave Honan: Quad helps mailers be more selective when it comes to their audience, to really look at where they’re not getting the necessary return on that audience — and then either help create more targeted marketing content that will better drive that audience to action or we help them pull those recipients out of their mail pool so they can invest elsewhere.
The right audience is key. But it’s not just about direct mail. It’s about omnichannel. Our data stack starts with the household — the physical address of consumers — and extends to other channels including digital.
We believe that a mix of the physical mailbox with digital — including email as a channel — helps create better audiences and better lift for our consumers.
Q. Where does personalization fit into the direct mail conversation?
Dave Honan: Quad has heavily invested in digital printing technology, which allows us to produce direct mail that reaches consumers on a one-to-one basis. Specifically, we’ve invested over $30 million in our digital platform in our direct mail business to allow for such personalization. In fact, across all of our investment spend in our direct mail business, nearly 85 cents on the dollar has was invested in personalization experiences so marketers can reach their consumers one-to-one on a very efficient basis — or to help sort the mail more efficiently — which allows our clients to get deeper USPS discounts.
Q. This all gets back to Quad’s deep understanding of the household — and the logistics of reaching consumers’ homes nationwide.
Dave Honan: Yes, and if you look at our manufacturing and distribution facilities, they’re clustered in strategic locations that allow us to efficiently consolidate mail volume for better postal rates for our customers. What people typically don’t realize is that when you receive multiple catalogs or publications at your home on the same day, oftentimes Quad has not only printed them, we’ve put them together in “walk order” — the actual sequence of how the postal carrier will walk or drive their route and deliver those pieces into your mailbox. So, we’re performing the sorting of the mail for the USPS and using our world-class logistics services to deliver the mail to the USPS where they can deliver the “last mile” to your home. This allows our customers to receive significant postal discounts from the USPS to reduce their mailing costs.
Q. Culturally, Quad talks a lot about finding “a better way” — a better way of doing things, which involves constantly evolving and innovating. That might be the main throughline or theme of this conversation.
Dave Honan: I have to say, I’ve never worked at a better place in my career than Quad. The attitude is very much: How do we help our customers achieve their goals? How do we find better ways to take care of our customers? I think it comes from the quality of our people and the strength of our MX strategy.
It’s really about people — enabling our people to keep creating better products and services for our customers. And it’s about our production and services platforms — building and evolving an integrated platform that can react in real time to changes in the marketplace.
Want to learn more and continue the conversation? Find out how Quad can help.
