Author: Bryan Formhals, Senior Marketing Specialist 

It’s hard to avoid reading about inflation and predictions of a recession in the news. Supply chain snarls, the war in Ukraine, and labor shortages have all contributed to the highest inflation in over 40 years.  

In response, the Federal Reserve has been raising interest rates and is likely to continue raising them in 2023. However, the jury is still out on whether the Federal Reserve can pull off a soft landing without pulling us into a recession.  

What to Expect in the Industry  

Consumer sentiment is a key indicator of where the economy is headed and it’s looking a bit grim right now. According to the second-quarter 2022 PRINTING United Alliance/NAPCO Research State of the Industry, around 79% of consumers expect “bad times” in the year ahead for business conditions, the poll number highest since the great recession in 2009. 

It’s no secret that during an economic downturn, marketing budgets are often one of the first area companies make cuts.  Less than excellent economic conditions mixed with tight labor and difficult supply chains creates the landscape marketers are facing. It’s gloomy but business goes on during challenging times. Marketers can stay a step ahead by evolving their strategy, tactics, and process out of necessity.  

With our 60 years of experience, Nahan has seen its share of economic peaks and valleys and have learned from these experiences on how to work with marketers to optimize their direct marketing programs to remain effective and focused on growth.   

Review Your Programs and Vendors 

With budgeting season upon us, it is important to know how your direct mail is performing and whether you’re spending your dollars effectively. In times like these, it’s critically important to ensure you’re getting the most return possible for your investment. 

The knee-jerk reaction might be to start slashing, but that often causes more harm than good long term. If you’re not thoughtful about the cuts, you’ll often find programs worsening in performance, ultimately leading to further cuts, and thus create a downward spiral.  

Instead, you’ll want to review your most effective programs to make sure they align with your current goals. It’s also a good opportunity to review your vendors to see if there are possibilities for improved efficiency. A few important questions to consider:  

• Has your data vendor fully optimized your mailing list with predictive analytics and refined targeting strategies?  
• Has your creative agency been successful at building test packages that successfully turn into control packages or are your packages experiencing response fatigue?  
• Do you have a regular testing program aimed at creative and data? 
• Has your production and mailing partner discussed options for optimizing your formats and campaigns for production efficiency and postal savings?  
• Are your partners helping you take advantage of USPS promotions and discounts? 
• Are you confident in your response and conversion attribution – do you know for certain which channels are driving performance? 
• How can strategy, data and creative more effectively work together to achieve your results?  

With the right partners in place, asking the right questions, it’s time to make sure you’re optimizing for improved ROI. This is where you can uncover opportunities for efficiency if you focus on the next topic: testing.  

About Data Testing 

Effective direct marketing is the convergence of data, creative, strategy, and testing. Whether the economy is humming along or in a recession, testing and optimizing will always be critically important. Here are three steps you can take… 

• Implement Predictive Modeling: Direct mail is all about generating a response from your customers. Predictive modeling using sophisticated analytics will help predict the likelihood of a response or conversion from your mailing. At Nahan, we work with our partners to utilize your current customer base and promotional history to help you target the best prospects and customers, allowing you to be more selective in who you mail to. 

• Creative Format Testing: Finding the right creative formats to present your messaging and offer is key and you have options. You’ll want to test for efficiency and economic optimization to improve your ROI. For example, if you are sending out catalogs, shaving an inch from the page size, or reducing the page count may not save you money on paper, but it could push you into letter-rate postage which will creative significant savings.  
• Creative Message and Offer Testing: Finding the right message and offer is a constant challenge in direct mail. Is your offer competitive and unique? Consumers can be fickle. If they are in a more conservative mindset due to economic uncertainty, brands will want to adjust their messaging or offer strategy to entice them to take action and convert.  

Mail Smarter: Find the Opportunities 

There are always opportunities for greater efficiency and effectiveness in the direct mail channel, no matter the economic climate. We have a mantra at Nahan and we think it’s appropriate for every brand to keep it top of mind: It’s time to start mailing smarter! 

In an economic downturn, there will be shifts in the industry and more than likely the mailbox will become less populated. But if you are mailing smart, that means when your message does arrive, it will become more prominent.  

There are always opportunities to optimize your budget. For example, take advantage of USPS promotions. Through the remainder of the year, direct marketers can save 4% on postage simply by including Informed Delivery as part of their campaigns. At Nahan, we have streamlined this process, so all our customers need to do is say “Yes!” and it’ll be added to their program.  

We don’t know just yet which way the economy will turn the remainder of 2022 and into 2023, but no matter what, marketers can find opportunities to improve ROI by mailing smarter. We’re confident if you do this, you’ll come out on the other side with a much more effective direct mail program. 

Are you currently testing your direct mail programs?

Testing is a key component of any successful direct marketing program. The most impactful direct mail marketers are constantly testing creative, lists, and offers, which enables them to make marketing decisions armed with more insight.

We have found that testing means different things to different people. Clients approach it in a variety of ways.

In this white paper, we provide an insiders guide to effective direct mail testing for programs of all sizes and across industries. It doesn’t matter if you’re just getting started with testing or a seasoned pro, our guide will provide you with actionable insights you can implement today.

Learn how the four phases of the testing process work together to drive optimization.

• Research
• Pre-Testing
• Testing
• Post-Campaign Assessment

If you’re ready to test smarter and drive ROI for your program, fill out the form below for the full guide to direct mail testing today!