A new study by The Software Bureau reveals that 60 per cent of marketers do not practice reverse marketing; the management of returned direct mail, which costs firms £4.02 per piece of returned mail.
Approximately 90 million pieces of direct mail (2.5 per cent) are returned to sender each year. Forty per cent of these or 36 million are returned due to the recipient’s wish to be removed from the marketing database, equating to a loss of potential revenue of £116 million and £29 million in wasted production costs.
Reverse marketing enables organisations to compile in-house do not mail lists that can be screened against future campaigns reducing the volume of mistargeted mailings, saving money and improving the reputation of the organisation among customers.
The study revealed B2B organisations to be the worst culprits followed by retailers, credit card providers, retailers, pension providers and charities. Conversely, local government was found to be the most responsible.
Martin Rides, managing director of The Software Bureau, said: “The fact that every piece of returned mail costs businesses £4 is incredible – this soon adds up, amounting to thousands per year.
“Reverse marketing is a key component to reducing the volume of mistargeted direct mail. It is shocking that only four in ten organisations manage their returns and, more importantly, learn from them.
“Our new initiative, Lean DM, helps organisations to identify the areas which produce the most wastage in their direct mail activity and minimise it. With the advent of GDPR and increased scrutiny from the media and legislative bodies, it is crucial that organisations focus on data hygiene.”
The study was carried out by ‘mystery shopping’ last month.
Returned mail statistics:
£4.02 = 3.6 billion pieces of DM sent annually (OFCOM) x 2.5 per cent returned (Royal Mail) x 40 per cent of returns due to opt outs (DMA) = 90 million returns x lost ROI (£3.22 Royal Mail) and average cost of a mail pack (£0.80).
