• U.S.

Direct Mail: Read This!!!!!!!!

19 minute read
Jill Smolowe

Does your hand clutch reflexively for the wastebasket when you encounter an invitation for a “21-day free trial period”? Do you feel a numbing sensation when confronted by a hysterical series of !!!!! or uppercased exhortations: THIS IS YOUR CHANCE!!!!! ONLY YOU CAN HELP!!!!! ORDER NOW!!!!! ? Have you begun to regard with suspicion bordering on paranoia every piece of mail marked OFFICIAL or V*A*L*U*A*B*L*E D*O*C*U*M*E*N*T*S I*N*S*I*D*E? Do the words “You May Already Have Won . . .” provoke in you an overwhelming desire to nuke the mailman?

THEN DON’T TURN THE PAGE!!! THIS ARTICLE IS SPECIALLY DESIGNED FOR YOU!!! You will receive valuable information that you can use in your home or business!!! For absolutely no extra charge, you can . . .

The flood has already begun, and in this holiday season it will be greater than ever. During the past year, 63.7 billion pieces of third-class mail found their way into mailboxes across the nation. For tens of millions of Americans, the seasonal tide, as faithful as the first snow or the appearance of tinsel and colored lights, has started to rise. Letter boxes are filled to bursting with envelopes of every size and color, living rooms and kitchens are suddenly cluttered with mail on all available surfaces, and wastebaskets are overflowing with the sale not made.

The producers of this mountain of missives call it direct mail or mail order. The U.S. Postal Service refers to the onslaught as “bulk business mail.” But to most people the deluge of material that descends on them each year is just plain junk mail, a typically American sobriquet that recognizes its vast and disorderly variety, its cheeky aggressiveness and its easy ability to raise hackles. Whatever its name, it is an extraordinary by-product of democratic civilization. Catalogs, catalogs, catalogs. Political flyers. Charitable solicitations. Environmental entreaties (on recycled paper, naturally). Sweepstakes packets. Magazine subscription offers. Investment brochures. Anything-of-the-month promotions. Coupons. Shopping guides. Freebie newspapers. Gewgaw samples.

And yet this vast variety is regarded by its recipients with ambivalence, not to say schizophrenia. The plain fact is that Americans love the stuff as much as they hate it. Last year 92 million Americans responded to direct- market pitches, a 60% jump in just six years. According to Marketing Logistics of Lincolnshire, Ill., a direct-marketing publisher, a grand total of $183 billion was shelled out for mail-order purchases and donations. Curse it though Americans may, the great outpouring of third-class communication can provide an antidote to loneliness, access to hard-to-find goods and a convenient answer to a housebound or time-pressed shopper’s prayers. Careful study of this stack offers a handy citizen’s guide to the most urgent political, environmental and social issues of the day. Cast in the best light, direct mail is the great American transcontinental linkup. It binds one nation, under Ed McMahon, indivisible, with bonus coupons and toll-free shopping for all.

For better or worse, America is married to the mails as a cost-efficient way of disseminating that most prized of 20th century commodities: information. Today more money is invested in direct-mail pitches, promotions and appeals than is spent on advertising in magazines or on radio or network television. The ensuing competition drives direct-mail marketers ever higher (and lower) to distinguish their message from the rest. To target potential customers more accurately, they compile and swap lists that provide increasingly detailed information about individual consumers, a practice that raises citizen concerns about privacy.

The biggest complaint of consumers, though, is that there is so much paper invading their homes. Over the course of a lifetime, the average American professional will devote eight entire months to sifting through mail solicitations. Third-class mail is now a nearly 4 million-ton colossus that accounts for 39% of all U.S. postal volume. This year about 41 lbs. of junk mail have been generated for each adult American. Of the pile that reached mailboxes, an estimated 44% landed in trash cans, unopened and unread. Many of the rejects were “prospecting letters,” mailings that fish for new clients and often hook only a 2% response — plenty, by industry standards, to justify the flow.

The prodigality leaves environmentalists seething about the direct-mail bombardment, which consumes millions of trees each year. Conservationists also fume that the discards amount to 3% of the total clutter in the nation’s landfills. And just how do they try to enlist public support? By mail, of course. The environmental watchdog organization Greenpeace USA sends more than 25 million pieces annually. Earlier this year the Environmental Defense Fund put out a direct-mail fund raiser (on recycled paper) that offered, in exchange for membership, a copy of the best-selling 50 Simple Things You Can + Do to Save the Earth. The book’s No. 1 suggestion for planetary rescue is “Stop junk mail!”

The rallying cry is being taken up by federal and state legislators who feel that the problems caused by direct mail are multiplying out of control. A key concern is the alleged threat to individual privacy, which many fear is infringed upon by the direct marketers’ aggressive collecting of trade information about the finances and spending habits of potential customers. Democratic Congressman Charles Schumer of New York plans to resubmit a bill to Congress next year that aims to prohibit the use of credit information for marketing purposes. At present, many credit agencies tap into sensitive data to compile lists that can then be rented by direct-mail marketers.

The Deceptive Mailings Prevention Act of 1990, which was signed this month by President Bush, bans mail solicitations that masquerade as government notices and prey particularly upon the fears of the elderly. Last January a New York State law went into effect that barred retail stores from keeping records of the addresses and phone numbers of customers who use credit cards. The practice is intended to verify identifications, but it is increasingly used to compile mailing lists, which are then rented.

Direct-mail practitioners counter that their product is the solution, not the problem. Mail-order shopping helps the environment, they argue, by keeping consumers out of cars, saving gas and motor oil and reducing air pollution. On the issue of privacy, they contend that direct mail is the least intrusive way to reach consumers. “It’s not like a commercial where you have to wait a whole minute for the evening news to continue, or a billboard that blocks the scenery, or the telephone call that gets you out of the bathtub,” says copywriting maestro Bill Jayme of Sonoma, Calif. “If you’re not interested, you just throw it out.” Says Denison Hatch, publisher of the industry newsletter Who’s Mailing What!: “Junk mail is a good offer sent to the wrong person.”

Proponents contend that direct mail is the most efficient way to organize and rally support for public causes. “How else do you communicate with people?” asks Peter Bahouth, executive director of Greenpeace USA. “For better or worse, it’s the lifeblood of the community.” Advocates argue that direct mail actually fosters democracy. “It is a very decentralizing force,” says Roger Craver of Falls Church, Va., who raises money through the mails for liberal causes. “In many ways, it has revolutionized American politics.”

Certainly it has revolutionized the way Americans conduct business. Once upon a time, direct mail evoked only two names: Montgomery Ward and Richard Sears. Ward, a Midwest traveling salesman, had a simple idea: “Sell directly to the consumer and save them the profit of the middleman.” In 1872 he published a one-page listing of 163 items, from red flannel cloth to oilcloth table covers, and mail order as we know it today was born. Fourteen years later, Sears, a Minnesota railroad-station agent, decided to mail a few $12 watches to his peers for $14 apiece. When the ploy worked, Sears hooked up with a Chicago watchmaker named A.C. Roebuck to establish a mail-order business. By 1927 Sears, Roebuck was mailing 75 million letters and catalogs.

Over the next six decades, the explosion of merchandise catalogs was so immense that competition from more specialized retailers finally demolished one of its originators: in 1985 Montgomery Ward left the catalog business. Today’s big sellers include J.C. Penney, L.L. Bean, Lands’ End and Sears. In 1989 Bean, the famous Maine purveyor of outdoor gear, took in almost 90% of its $600 million net sales from the 116 million catalogs it mailed. Wisconsin’s Lands’ End sold $545 million worth of clothing and domestic items last year through its 90 million catalogs. “It’s always fun to have them arriving at the door,” says Lands’ End president Richard Anderson. “It’s like having Christmas every day.”

But even the most tolerant consumer might feel like Scrooge in the face of so much postal excess, no matter how worthy the touted product or cause. Last year the Red Cross responded to Hurricane Hugo and the San Francisco earthquake by mailing 12 million appeals, twice the organization’s usual annual outpouring. Disabled American Veterans sent 38.5 million fund-raising pieces. In the case of some nonprofit organizations, as much as 90% of all funds raised through mail campaigns are applied to more mailings to raise more money.

Even so, direct mailers maintain that junk mail is the most cost-efficient way to reach out to customers. They claim that a single mailing on average draws 10 times as many responses as newspaper ads and 100 times as many as TV ads. Plus, they note, they can judge the effectiveness of a mailing with far greater precision than most other advertisers can.

Small wonder so many advocacy groups turn to the mails. Take the American Association for Retired People and the National Rifle Association, two of the nation’s most powerful lobbies and, not by coincidence, two of the largest direct mailers. In addition to the literature it sends its 32 million members, the A.A.R.P. each year puts into the mail stream 50 million pieces simply prospecting for new adherents. The N.R.A. generates up to 12 million pieces monthly. Each group has the capacity to flood Capitol Hill with thousands of letters when it feels its interests are threatened. Earlier this year the N.R.A. sent out 10 million “membership alert” mailings, urging gun owners to oppose legislation that sought to ban semiautomatic assault weapons and impose a waiting period on the purchase of handguns. Neither restriction passed Congress.

Cynics might say such pitches know no better target, since the Senate and House are two of the country’s biggest users of the mails. Through the franking privilege, which enables members of Congress to use their signatures as postage, elected officials can deluge voters with mail at taxpayers’ expense. During the past presidential election year, 805 million pieces of political literature spewed from Capitol Hill, at a cost of about $113 million.

Critics contend that little of that outpouring went for its authorized purpose: to enable elected officials to conduct a dialogue with constituents. Most of it, they argue, went to help incumbents consolidate their hold on power. The outcry has given rise to some reforms. House and Senate members up for re-election are prevented from issuing mass mailings just prior to elections. This year the Senate prohibited members from transferring individual franking allocations to colleagues, and the House agreed to restrict franking funds to about $180,000 for each representative.

Commercial and nonprofit direct mailers have to work much harder than members of Congress to address their pitches to specific audiences. To sing their siren songs effectively, they rely on a bewildering variety of list compilers, list brokers and list managers. In short, the mail-order industry is teeming with precisely the sort of people Montgomery Ward set out to eliminate: middlemen.

The listmakers wed advanced computer technology to an ever expanding data base to churn out highly specialized rolls of potential customers. They aim to know not only where you are but also who and what you are. By cross-indexing lists obtained from credit agencies, political parties, mail-order companies and other organizations, a direct-mail specialist can merge and compare the data to identify the groups you belong to, the car you drive, the party you vote for, the amount you paid for your house. All this helps direct marketers identify the goods, services and causes that might be of interest to you — and whether you are a good credit risk.

Much of the information is frighteningly easy to obtain. A guide published by the Quill Corp. of Lincolnshire offers public-domain prospecting tips for listmakers. Among other things, it suggests taking a look at marriage licenses, birth certificates, voter registrations, sporting and business licenses and the membership rolls of schools, churches and civic organizations. Quill advises that these lists can often be obtained through local government offices.

Amassing such information is a major investment of time and money. Hence many marketers turn to Direct Mail List Rates and Data, the industry’s Domesday Book, to mine existing lists. This 4-in.-thick volume, published bimonthly by Standard Rate & Data Service of Wilmette, Ill., at an annual cost of $317, features descriptions of 10,258 rental mailing lists. The tome does not provide specific names and addresses of customers-in-waiting, but it indicates who owns compiled lists and which rolls include the names of people who responded to mailings. These “response lists” are the jewel in the direct-mail crown. According to marketing lore, if your name is on a response list, chances are good you’ll buy again.

The name-trading game is now an estimated $3 billion business in itself. Rental lists, which cost anywhere from $50 to $150 per 1,000 names, are bartered not only by most mail-order houses and many nonprofit organizations but also by a few public utilities and telephone companies. List owners typically pay a 20% commission to a list broker and 10% to a list manager. Even with those overheads, some concerns make more money from the rental of their lists than from the sale of their products.

Once acquired, customer lists can be fine-tuned to an exacting degree. Suppose a financial-services company wants to identify potential clients for home-equity loans. Good list brokers will first define an audience, say, people who own $100,000 homes, have lived in them for 10 years or more and are likely to have built up substantial equity in the dwelling.

Brokers then cast a wide net. They might draw on Census Bureau data, which are available to the public, to identify geographical areas where homes fall into the targeted price range. They can tap into lists from major compilers, like Donnelley Marketing of Stamford, Conn., whose data base details the buying habits of 80 million households, or into various computerized systems that identify neighborhoods by consumer behavior. They might pay credit agencies like TRW of Cleveland and Equifax Inc. of Atlanta to draw up sophisticated demographic models, consumer profiles and potential customer lists. A thorough computer sorting of all these sources — which sometimes includes information from up to 100 lists — will then turn up a list of customers who might respond positively to a pitch for a home-equity loan.

Zap! The direct mailer can then aim a solicitation at a letter box with a precision bordering on the scientific. While some people find the attention flattering, others consider it insidious. “There’s something kind of creepy about companies knowing more about you than your own family, and compiling and trading information about you behind your back,” says Robert Ellis Smith, editor of the watchdog newsletter Privacy Journal. Direct marketers strongly deny that they are intruders. “Nobody wants dossiers compiled about them,” says Michael Manzari, president of Kleid Co., a New York City concern that brokers and manages lists. “We’re not doing that. We’re identifying markets.” As a result of their care, goes the argument, less unwanted mail is inflicted on consumers. Says Katie Muldoon, president of a New York City direct-marketing agency: “If the mailbox is going to be crowded, we want to make sure it’s stuff people want.”

Still, direct mailers are growing more sensitive to consumer concerns about increasingly interwoven data bases. A few direct mailers refuse to rent their lists to other mailers. Among the holdouts: the Red Cross, Reader’s Digest and AT&T, which posts close to 300 million pieces of promotional mail annually.

Some trade or offer names for rent but otherwise keep information about their customers under tight wraps. Lands’ End offers no information about individuals when it passes on their names. “We are fanatical about keeping information about customers in the office,” says Michael Atkin, the company’s marketing vice president. The Time Inc. Magazine Co., which publishes TIME and sends out close to 35 million pieces of promotional mail each year, rents its customer lists. But they are made available only to buyers who agree to strict conditions, such as refusing to use telephone appeals for any of the acquired names. The company, like many others, will not rent a list until it sees and approves the proposed mailing.

Such safeguards help make the direct-mail flood more selective, but it is likely to continue to spread. In fact, the glut may grow exponentially as relatively cheap technologies increase the numbers of marketers who can tap into the stock of consumer information. Last month Lotus Development Corp. of Cambridge, Mass., introduced a Macintosh-compatible software data base culled from more than 7 million U.S. companies. The $695 package will enable small concerns to enter the business-to-business direct-market mainstream. Another Lotus data base, due early next year, will allow small businesses to tap into the consumer market as well. Says Henry Hoke Jr., publisher of Direct Marketing magazine: “It’s brought the mailing-list business to Main Street.”

Despite the scorn the pitches often elicit, there are indications that consumers don’t mind the junk deluge as much as they sometimes say. A national survey released last June by Equifax found that direct-market mailings stimulated 54% of all Americans to make at least one purchase. One of every six Americans has made six or more purchases through the mail. By contrast, only 15% have bought at least one item through TV home-shopping clubs, and only 14% have responded to telephone solicitations.

A U.S. Postal Service survey of 5,000 families made two years ago found that 60.3% of respondents did not mind getting “advertising mail” that did not interest them, so long as the pile included some pieces that caught their eye. Not surprisingly, households with incomes of $65,000 and up received more of this mail than other income groups — and also wanted less. Although the elderly, particularly the homebound, often rely on mail-order shopping, the over-70 crowd felt that they received too much advertising mail. Younger consumers tended to want more.

Some peeves cut across all demographic lines. One typical complaint is that checks, credit cards and other valuables can get lost in the mounds of paper that consumers toss out daily. Another common gripe: duplicate mailings. While some of the replication is carelessness on the part of direct mailers, the overlap is testimony to the number of times that consumers’ names are bought and sold in the direct-mail marketplace. Many consumers also resent notices ! advising them that they have been preapproved for a credit card. “How do they know that I’m a sound credit risk?” they wonder.

Consumer resistance to direct mail appears to be rising. Last May the New York Telephone Co. enclosed a form in the monthly bills for its 6.3 million residential customers, asking if they wanted their names removed from a list that it intended to rent to other direct mailers. A surprising 800,000 people wrote to demand that they be removed from the offering. The 3,500-member Direct Marketing Association, a group that has been monitoring, boosting and charting the industry since 1917, reports that more than 1 million people have signed up for a service that aims to eliminate subscribers’ names from national direct-mail lists.

Sensing the backlash, direct mailers are beginning to rethink their more profligate tactics. “People simply don’t have the time to sift through a lot of unwanted and unnecessary pieces of mail,” says Bill Davis, who runs the Database Marketing Corp. in Burlington, Mass. “If you treat your own customers with a sort of throw-it-against-the-wall-and-hope-a-little-of-it- sticks approach, you’re actually alienating them.” There is also a new economic reason to reassess the scope of the mail flow. Next February postal hikes could raise third-class costs by as much as 33%. (The current rates provide the Postal Service with revenues of $8.1 billion; additional revenues are generated when customers send in their checks and receive their purchases through the mail.)

Direct mailers who want to demonstrate their sensitivity to environmental concerns about the mail volume might emulate Smith & Hawken, a San Francisco Bay Area business that markets specialty garden tools. Since its founding 11 years ago, the company has donated 10% of its pretax profits to environmental causes. Last year 80% of the company’s $50 million in sales was generated by orders placed through 20 million nonrecyclable catalogs. Co-founder Paul Hawken decided that a greater effort was needed. He has publicly pledged to print all Smith & Hawken catalogs on recycled paper, use only soy-based inks and plant two trees for every one cut down in S&H’s publishing effort. He has further promised to let customers know to whom S&H rents its lists and to offer them a chance to remove their names from the rolls.

Other publications and mail-order houses routinely duplicate that last offer. But by the time a written demurral is processed, consumers may find that their names have cropped up on several new lists. One much needed reform would be for direct mailers to provide adequate time for customer-deletion requests to roll in before rental lists roll out.

The intriguing, enticing, exasperating mountain of direct mail is not about to go away. The fact is Americans like it too much and find it too useful. After all, while a trip to a junk-free mailbox might be less irksome, it would also be less helpful and interesting. The challenge, for senders and consumers alike, is to look hard at the flood of third-class communication and find ways to maintain the dialogue at a reasonable pitch.

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