In this episode, we explore how direct mail continues to thrive as a powerful marketing channel in the digital age. Executive Director of Product Solutions, Margaret Pepe, dives into the innovative ways USPS is helping businesses integrate technology, including augmented reality and artificial intelligence, into their direct mail campaigns to drive engagement. Whether you're a marketer or just curious about the evolution of mail, this episode uncovers the future of direct mail in an increasingly digital world.
This week on Mailin' It, Karla and Jonathan are joined by Margaret Pepe, the Postal Service’s Executive Director of Product Solutions, to discuss the enduring relevance of direct mail in today's digital marketing landscape. As digital ads increasingly flood social media, email, and websites, direct mail offers a tangible, trustworthy, and less overwhelming alternative. Margaret shares how mail creates lasting impressions, often remaining in homes long after digital messages are forgotten. Tune in to discover USPS’s latest innovations and learn how marketers are combining direct mail with digital strategies to maximize engagement.
Karla Kirby:
Hi everybody. Welcome to Mailin It, the official podcast of the United States Postal Service. I'm Karla Kirby.
Jonathan Castillo:
And I'm Jonathan Castillo. I don't know about you, Karla, but it seems like social media and mobile devices have opened up endless ways for advertisers to reach me. A lot of times, that's great because the ads are for things I'm interested in. Other times not so much. It's actually kind of exhausting.
Karla Kirby:
I agree. And thank you, Jonathan, for teeing up this episode nicely because we're going to talk about how Mail continues to be a powerful marketing channel, even at a time when we're constantly on our digital devices. Here to talk about that with us today is Margaret Pepe, the Postal Service's Executive Director for Product Solutions. Margaret, welcome to mailing it.
Margaret Pepe:
Oh. Thank you. I'm excited to be here. I guess I better put my phone down.
Jonathan Castillo:
Margaret. You know, I wasn't kidding about what I said in our intro to this episode. For all its strengths, digital advertising can be overwhelming. A lot of times we're being bombarded by so many ads in different places, social media, in our email feeds, in our online search results that we don't even notice that the ads are there. But before we talk about direct mail and how marketers are effectively integrating direct mail with digital channels, why don't we start by talking about product solutions at the Postal Service. Can you take us through what your team's role is here?
Margaret Pepe:
Sure. Product Solution is organized into five key areas, one of which is Product Management, which is the key team that is responsible for the development of new strategies, products, programs that ultimately strengthen the value of mail, as well as generate new ideas to grow and to retain mail volume.
Karla Kirby:
So direct mail is especially important, I'm assuming, as a marketing tool for businesses. In fact, there's an entire ecosystem of service providers, printers, and marketing professionals dedicated to the print mail industry. In an increasingly digital world how do you convey to businesses and marketers the value of the US Mail?
Margaret Pepe:
Well, direct mail works, right? It's a very cost effective marketing channel. And you know, many customers, they trust direct mail over digital channels, especially when making a purchase decision. You know, it's tangible so people can engage with that piece of mail and it does install confidence to the recipient because they can actually trust a sender because it's more likely to come from a trusted source. And with today, you know, increasingly concerns around digital privacy and securities, a lot of consumers really feel safer when they use direct mail. And you know, in the digital space, there's a lot of competition for your attention. I mean, just think about how many emails or ads you get each day. Some will say they follow you everywhere. Have you ever like, you know, went past a store and it just pops up here and it pops up there? So the ads are starting to follow you, but that also leads to digital fatigue, right? And we get tired and we start to tune those things out. So we have filters, and those filters allow us to sort out those messages or they fall off your feed and you can't find them. Well, you don't have a filter on your mailbox. So mail, it just tends to stay visible like a catalog sitting on a coffee table or a coupon booklet or an ad from a store that you shop at might be more likely to get posted on a fridge. And when the marketer, you know, uses personalization, it does help to deliver that superior customer experience.
Jonathan Castillo:
Since digital or online marketing emerged years ago, it's been seen as a quick low cost way to create targeted advertising. How do businesses determine whether they're getting the right return on their investment when they use direct mail to reach customers and prospects?
Margaret Pepe:
Well, sometimes the digital world success actually works against it. There's a perception that digital was cheaper and therefore more effective. But that's really starting to swing back now to physical mail and to direct mail. You know, prices are adjusting what you pay for online ad has gone up and it isn't necessarily more effective. Matter of fact, over half mail recipients have tried a new product or service or even an establishment in the past six months because of a direct mail campaign. That means it's effective. And there's a lot of research that is also starting to show that direct mail value does exist. In one report, 84% of marketers surveyed said direct mail provides the highest return on investment of any other marketing channel. And that's up from 67% in 2022 and 74% in 2023. And more than four out of five marketers said that direct mail delivers the best conversion and response rate. And 82% said they're increasing direct mail spend this year. And that's up 58% increased direct mail spend in 2023.
Karla Kirby:
Well, those are some definitely impressive numbers, and I do look for my pizza coupons in the mail, but for marketers, it's not a choice. It seems to be one or the other, meaning digital or direct mail, correct?
Margaret Pepe:
Yeah, that's right. You know, marketers, they have many options to allocate their advertising dollars. Direct mail works best as a part of a multi-channel marketing strategy. Some of the benefits are increased web traffic. So when it's part of the marketing mix, they see higher conversions and each marketing channel is consumed in different ways. And an omnichannel campaign can use each channel strengths, whether it's text or pictures or audio or video, to really fine tune a message and elevate a brand or even a product.
Jonathan Castillo:
Of course, informed delivery is the main way the postal service helps bring all of these channels together with more than 62 million subscribers. Informed delivery not only gives you a digital preview of your incoming mail, but it lets you interact with certain mail pieces right from your computer or your mobile device. Let me ask you this, how has informed delivery impacted direct mail's popularity since it was first introduced?
Margaret Pepe:
I think of informed delivery as the postal services omnichannel tool, and it has been super successful in helping marketers marry that physical and that digital, allowing them to click through and add into coupon as an example, and just to encourage mailers to use that tool. It's been part of our promotions for over a decade and it's had very great results.
Karla Kirby:
So what are some other ways marketers are using the new technologies and techniques to get more creative with their direct mail campaigns?
Margaret Pepe:
Well, I would say we offer a lot of promotions and incentives to integrate technology or to become creative with direct mail campaigns. The one that comes to mind is really the QR code. And I think that has really changed the omnichannel marketing. You know, since the pandemic, you see these codes everywhere, right? As a mail and customer, you're getting more comfortable using them and there are great triggers on a marketing campaign. It takes you to an experience, whether it's a video and print or an interactive website. These are all being done in order to advance the technology. Another way is, you know, the integration of voice assist and of course Artificial Intelligence, AI. We're leveraging AI to create content or to store strong call to action. These are all part of the emergent technology promotions, and we always look to try to encourage the mailing industry to integrate these new technologies into the direct mail campaign.
Margaret Pepe:
Of course, there's others like the Near Field Communication, which is embedding a chip in a mail piece. That's how they know where you are, right? Those little pop-up ads. And then Virtual Reality, Augmented Reality, there's a lot of options, but our most popular one, Karla, really is our tactile, sensory, and interactive promotion. This is where it really encourages the marketer to really incorporate interactive elements, whether it's a spot treatment like a gloss or a varnish, whether it's scent to create a multi-sensory experience or using, you know, special visual effects like texture, even taste. And you know, there's a lot of great things that are being done as a result of that.
Jonathan Castillo:
Something that I've heard about recently, maybe you can help explain for me is what is reply mail IMBA?
Margaret Pepe:
Well, reply mail IMBA is, you know, when you send something out of marketer and they want to provide an envelope for the customer or the recipient to send something back to you. And so that's a reply mail piece. And then when you marry that up with intelligent mail barcode accounting, we're able to scan those pieces and capture the payment via scan base versus having to weigh and rate those individual pieces. That's also part of the promotions Jonathan, thanks for asking.
Jonathan Castillo:
Absolutely. It sounds much more efficient as well.
Margaret Pepe:
Yeah, it's great. And I think that it encourages our remittance mailers and others to take advantage of the savings as well as by providing their consumer an envelope to return their piece, especially for donations.
Jonathan Castillo:
Now, we talked about return on investment or ROI bit earlier in the segment, but do you have any success stories maybe that you can share with us about these integrated campaigns?
Margaret Pepe:
Yeah, I think I have a great example. One from my own personal experience. You know, my son, he's played soccer his whole life. He's continued to play into college. He's a digital native, right? So he does everything on his phone and based on his digital data, brands have tried to market to him probably in other channels such as social, et cetera. But one day he got a postcard that had a QR code on it and he decided to scan it and it took him to a website that had a video and print that really demonstrated what he's passionate about and how passion met performance. And it showcased this product, new pair of shoes, that would accelerate his ability to play his sport that he so loved. So using that physical direct mail campaign with a QR trigger that was super hyper-personalized, it touched him, it touched his passion, his passion around soccer, and it helped him convert from one brand to another. I think that's a great example of an integrated campaign that was able to market to a digital native and convince him to spend his hard earned dollars on this new product that wasn't a brand he was familiar with.
Karla Kirby:
So when you look at direct mail overall, how do you measure successes of campaigns? Does your office look at or recognize any marketers for their efforts or their particular campaigns?
Margaret Pepe:
So, we do have some direct marketing campaigns that have really stood out over the years, both that show up in promotions where they've done something that's really stood out the box and others are in case studies that we hear from talking to the marketing industry. For instance, I know of one where a marketer tested a social channel against direct mail, so they had a control test A versus B, and they did some interactive elements within their campaign. It was rememberable, it was reliable, it was personal. It the campaign B, which was the direct mail campaign, outperformed those other channels. So we hear of stories such as that. We also have recognized some of our industry partners further out of the box creativity in terms of leveraging scent in a creative way to touch the neuro senses of the recipient. We've seen some use holographic treatment and create magnets trailing edge, so it stands out in the box. So we have lots of different techniques and examples that the mailing industry has used to make their piece really stand out within the box. And some industry segments are really leading the industry in some of those efforts and seeing the results, so they continue to do it.
Karla Kirby:
So Margaret, you mentioned some of these, I guess, trailblazers in the direct mail space. Where could somebody see some of these examples to try and get ideas about maybe how they can take advantage of our direct mail products?
Margaret Pepe:
Well, Carla, we have just recently updated our irresistible book, which showcases all of some of these best practices and best techniques, and it's free and available on irresistiblemail.com, where you can see all different types of the things we've talked about in terms of print, in terms of leveraging technology that hopefully inspires others to integrate them into their campaigns.
Jonathan Castillo:
Highly effective.
Karla Kirby:
Exactly. So are you finding Margaret, that marketers who might have stopped using direct mail in order to prioritize digital channels are coming back due to the postal services wide range of new options? You mentioned that you know, multi percent increase from 22 to 23, so what does that look like?
Margaret Pepe:
Yeah, there are some industry segments that have definitely pulled back or shifted for various reasons. You know, cost is always one of the factors, whether it's postage, but it's not solely postage. Sometimes it's the print and the production as well to create those pieces. Others are part of a larger strategy. For instance, we know some industry segments where the marketing team was replaced solely by a digital team. And when you do that, you know, you only invest in digital channels, which are not as effective as direct mail. We're now starting to see a shift back because direct mail works, and when it's integrated with those other channels, it's been proven it's a powerful tool compared to standalone tactics.
Jonathan Castillo:
I think it's great to hear that businesses are giving direct mail a second look for those advertising needs, like you mentioned. What sorts of programs has the postal service launched in recent years to encourage increased use of direct mail?
Margaret Pepe:
Well, in addition to promotions, we've introduced several different incentives, whether it's a catalog incentive or a marriage mail incentive. But the most popular one has really been the growth incentive. It's for first class mail and marketing mail. And what that does is it really incentivizes a mailer to grow volume over their baseline volume and they get a postage credit of 30% to apply to future mailings. Now, there are some eligibility rules such as, you know, you have to have a million pieces in your baseline and it looks at your previous fiscal year. But the point is for the first year we had over 1300 businesses participate and we're on track to generate over 3 billion new pieces of mail that we would not have had without this incentive.
Karla Kirby:
We go to what, 165, 167 million homes every day? It's gotta be easy to hit those eligibility targets.
Margaret Pepe:
For some it is, and, and for others it has to mean they have to change some of their strategies and they have to move some of their, you know, maybe what they were going to do. We've seen that they have increased some of their marketing strategies and tactics, which means they've moved up a campaign cycle or they've done a nurture campaign where they're sending additional pieces to those recipients in order to inform them about that new product or that new service. We've seen several industry segments sharing that. They've increased their volume and explored new strategies as a result of this initiative. For instance, financials, grocery stores, and even, you know, one that was selling industry equipment all came back to the mail and or advance some of these strategies to take advantage of this incentive.
Jonathan Castillo:
Margaret, you mentioned something about marriage mail. What is that exactly? Is it what I think it is?
Margaret Pepe:
Well, I don't know, Jonathan. I mean, it's when you marry up other advertisers advertisements and put 'em into an envelope. So think about it as shared mail. As the cost increases to mail a piece, some marketers are getting really smart and going to the local communities, to the lawn service, to the pizzeria, and they're saying, hey, do you wanna save on some of these postage costs by marrying up their advertising or their coupons and putting it into one envelope? So we came up with a marriage mail incentive that will allow some of these small marketers to be able to expand their reach and grow their market by being able to share on the cost of the postage. And so they get a discount from a marriage mail incentive by putting four more advertisers into the envelope and mailing 10 times a year. And we've seen, I think over $43 million as a result of this initiative. So it's another great way. We're just trying to find solutions in order to meet the needs of the industry.
Jonathan Castillo:
I would've never thought that, but what a great incentive and what a great way for small to mid-size businesses to really kind of, like you said, expand their reach. That's great.
Karla Kirby:
You know, I have to be honest, I did wonder how that was happening when the marketing mail comes and you see two different, you know, services combined in one. So, huh, lessons learned. I'm sure that years ago it would've been hard to predict direct mail would have become this advanced. Taking advantage of technologies like augmented reality, QR codes, and even microchips. What do you see as the future of direct mail?
Margaret Pepe:
Well, that's a tough one because I prefer to not talk about it in the terms of the future of mail, but more so in the future of the Postal Service. I want people to realize that there is a whole organization dedicated and supporting direct mail as well as the ecosystem through leadership opportunities, through partnerships. And we want to encourage digital marketers to try mail, we want to simplify the process in terms of permits, in terms of rules, in terms of regulations. And then lastly, you know, as technology advances, we want to continue to find ways to enhance and integrate within the marketing ecosystem and continue to evolve. And, and you know, I truly believe that with technology such as AI and others, we can play a greater role with that in the ecosystem and with our partners.
Jonathan Castillo:
I'm so glad that you mentioned AI because it really seems like AI is everywhere these days, right? How are the Postal Service and our customers using AI now to get their messages across?
Margaret Pepe:
Well, Jonathan AI is the new buzzword in the marketing industry. And brands are exploring the ability to use AI, whether it's to create content, whether it's to write copy, whether it's for data analysis from both a performance as well as using hyper-personalization, kind of like what I shared with my son, right? Being able to get those digital breadcrumbs and know what would be passionate and performance to him. You know, that's why we started to incorporate it into our technology promotion to really encourage the industry to explore AI and its capabilities so that they can continue to integrate it with direct mail. And, we are exploring and testing the ability to leverage computer visioning technology to improve the informed delivery campaign creation and expedite the promotion approval process. And these efforts will allow us to be able to be more precise in terms of our content approval from our customers who submit it to make sure it meets our rules and our requirements, as well as make sure that the campaign has a strong call to action and then leverage it in order to make sure we use it as a training tool to our employees when we are looking to educate them on items that they may have missed.
Jonathan Castillo:
It certainly seems like AI is not going anywhere anytime soon.
Karla Kirby:
Not at all. But Margaret, you have shared with us today a wealth of information. Definitely need to check out irresistible?
Margaret Pepe:
Irresistiblemail.Com
Karla Kirby:
Irresistiblemail.Com to see the wealth of different marketing, direct marketing tools that we have available. Is there anything else that you would want our listeners to know about direct mail? You know, regardless of the size of their entity, where should they look to get more information?
Margaret Pepe:
Well, there's a wealth of information available on Postal Pro for both mail promotions and incentives. There's information in terms of guidebooks and how to get started. There's webinars, lots of information there, as well as how to enroll in one of the promotions. And I think that, you know, I want the audience to know that the organization is committed to being able to continue to have direct mail, be a channel that continues to be here today and into the future. And our team and the entire organization is continuing to find ways to provide solutions that both inspire creativity, that drive success, and really just keep mail relevant for today and into the future.
Jonathan Castillo:
I'm so glad that you brought it up. I was wondering, could you speak on how has the Delivering for America plan bolstered Product Solutions, you know, efforts?
Margaret Pepe:
So within the Delivery for America Plan, it states that strengthening the value of mail is a key component. And in Product Solutions, we feel we own that strategy specifically around mail. In the product portfolio, we have lots of products, programs, and services. Matter of fact, there's over 60 of them that generate over $50 billion. And so we have to continue to evaluate our current products to see if they meet today's market demands of both the organization and the mailing industry, as well as, you know, leverage technology and identify new programs, new incentives that will continue to meet the needs of the mailing industry. And I think that the Deliver for America Plan lays out that roadmap for us in our department, and it's super energizing for us to know that we have the entire organization behind us saying, hey, we want mail to continue to be here today and into tomorrow.
Jonathan Castillo:
Margaret, thank you so much for joining us today. It was an absolute pleasure speaking with you and incredibly informative.
Karla Kirby:
Absolutely. And you're welcome back anytime. Let us know the new best and brightest thing coming out of your office.
Margaret Pepe:
Thank you both. It's been a pleasure.
Karla Kirby:
It is time for another one of our Did You Know segments when we share interesting facts or anecdote related to the US Postal Service. Jonathan, do you want to get us started?
Jonathan Castillo:
Sure, Karla. Did you know that countries sometimes jointly release stamps to commemorate a common event or honor the same person? The first time the US did this was 65 years ago when the United States and Canada both released a stamp in honor of the St. Lawrence Seaway opening in April, 1959. The Seaway was constructed as a binational partnership, allowing ships and other vessels to travel from the Atlantic Ocean to the Great Lakes.
Karla Kirby:
Interesting. I wasn't aware of that. What other events have joint stamps celebrated?
Jonathan Castillo:
Well, in 1986, France and the United States issued similar stamps featuring the Statue of Liberty for Lady Liberty's 100th birthday. And in 1992, Italy, Spain, Portugal, and the US issued stamps for the 500th anniversary of Columbus's voyages to the Americas. One of my favorites is the 1994 stamps from China and the US featuring illustrations of the endangered North American whooping crane and Chinese black-necked crane. Our country's jointly issued those stamps to shine light on wildlife conservation efforts.
Karla Kirby:
I have to keep my eye out for some of these joint stamps in the future.
Jonathan Castillo:
You should. Many people consider them collector's items.
Karla Kirby:
Well, my fun fact for today is also about stamps. Did you know about the most famous US stamp printing error that ever occurred?
Jonathan Castillo:
Oh, no. Why do I feel like this could be bad?
Karla Kirby:
Don't worry. It wasn't that bad. In 1918, the Bureau of Engraving and Printing made a printing error so that instead of an upright airplane, the stamp showed an upside down airplane. The plane pictured was the famous JN-4-H "Jenny," which includes a mail compartment in place of a front cockpit.
Jonathan Castillo:
You're right, that could have been a lot worse. Were the inverted stamps ever sold?
Karla Kirby:
Only one sheet of a hundred stamps was sold to a collector at the New York Avenue post office. He later sold the sheet to Eugene Klein, a Philadelphia stamp dealer for $15,000. Klein then sold the sheet to a collector colonel H.R. Green, who kept some stamps and sold the remainder. And get this, the "Inverted Jenny" is the most requested stamp for viewing at the Smithsonian National Postal Museum, and it has set record prices at auction.
Jonathan Castillo:
I'll definitely have to check those out the next time I'm there.
Karla Kirby:
And that wraps up this edition of Did You Know.
Jonathan Castillo:
You know, Karla, I'm so glad we had Margaret on with us today. I love the way she took us through the staying power of direct mail in an increasingly digital world. Like she said, there's just something reliable and tangible about a physical piece of mail. And it's remarkable that as a marketing channel, businesses and marketers are beginning to realize, once again that customers still view mail as a predictable, trusted source of information. And that it's an incredibly important part of multichannel, digital and social media campaigns.
Karla Kirby:
You know, Jonathan, I agree. And just to see that increase from 2022 to 2023, what's that, a 7% increase and that return on investment and those marketing channels using direct mail products, definitely something we need to keep our eye on and have her back.
Jonathan Castillo:
And that wraps up this episode of Mailing It. Don't forget to subscribe to mailing it, wherever you get your podcasts, to make sure you don't miss the next episode and follow along on Instagram at US Postal Service, X, formerly known as Twitter, at USPS, and on Facebook.