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Drop-off in prospecting pushes down mail volume

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A year after the anthrax scare rattled marketers, direct mail continues to struggle. But the problem has little to do with a lethal chemical substance. Direct mail volume is down because direct marketers are not prospecting, or they are prospecting very little, said several industry experts.

Compounding that situation is the fact that companies are conducting smaller mailings to specific targets or are mailing to their customer base less often in order to cut costs in a rough economy.

The decline is staggering: Three billion fewer pieces of standard business mail will be sent this year compared with 2001, according to the Direct Marketing Association.

Despite that sobering statistic, many b-to-b marketers claim "snail mail" still reigns supreme over other forms of direct marketing.

The Harvard Business Review spends the bulk of its direct marketing budget on direct mail. "Direct mail continues to be the main source of acquiring customers," said Paul Szymanski, marketing manager for Harvard Business School Publishing. Speaking in July at Direct Media Inc.’s 2002 Mailer Conference & Co-op, he added that direct mail provides better response rates than other methods, such as e-mail marketing.

While acknowledging direct mail’s effectiveness as a prospecting tool, Szymanski said Harvard Business School Publishing is currently using it primarily to drum up repeat business. "We’re focusing on selling more and more stuff to our existing customers," he said.

DMA President-CEO H. Robert Wientzen said in a recent interview (see Q&A, Page 20) that the economic slump has hit prospecting harder than any other area of direct marketing.

"If you are not replacing your customers at historically acceptable rates long term, you are going to have some problems," Wientzen said. "I am most concerned about that."

Expensive prospecting

Though it’s a basic element of direct marketing, prospecting is expensive, especially at a time when mailers are hard-pressed to invest.

"Acquisition has gotten expensive," said Mary Sue Rynecki, senior VP-circulation at Newsweek.

George Mosher, president of National Business Furniture, said the
b-to-b catalog marketer cut back on prospecting this year, though it has recently begun to increase its efforts.

Bucking the trend, Skillpath Seminars, a company that uses direct mail to aggressively market the more than 20,000 b-to-b training seminars it runs annually, is spending more money on prospecting this year, said Eric Snider, senior VP-marketing. Skillpath’s business is picking up after plummeting 30% last year because of the recession, he said.

"Do not forget about prospecting," he cautioned. "You’ve got to keep that pipeline full."

Snider said that when it comes to direct mail versus e-mail, whether to existing or potential customers, "there’s no real contender to replace direct mail."

Some marketers, however, are less keen about direct mail.

"Direct mail is not pulling results," said Sandy Carvalho, Americas integrated marketing communications manager for IBM Corp. "Many more people are responding to e-mail rather than print."

The only exception, Carvalho said, is IBM’s Tivoli division, which markets security and system management software. "With good segmentation and a good package and call to action, we’re yielding great results," she said. "Because of Sept. 11, because of the focus on security and data protection, we’ve had great success with [Tivoli] direct mail."

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