Direct Marketing vs. Email Marketing: Which Strategy is Best for Small Businesses?

Over the years, direct mail and email marketing have proven to be tried and trusted methods of engaging customers, driving sales, and building brand loyalty, yet each marketing channel offers unique benefits and presents a unique set of challenges to overcome.

With the rise of digital marketing, email campaigns have emerged as the most popular, cost-effective and measurable form of customer communication. However, direct mail continues to provide immense value to small and medium-sized enterprises (SMEs), with its unrivalled ability to help companies stand out amongst the digital clutter and capture attention through tangible, personalised experiences.

In this article, we’ll compare direct mail vs. email marketing, examining essential factors such as overall effectiveness, cost, engagement rate, and overall return on investment (ROI).

After reading it, small business owners and managers should have a clearer understanding of which marketing strategy aligns best with their marketing objectives.

Comparing direct mail and email marketing: understanding the 10 key differences

Direct mail and email marketing are often compared to each other (and actually complement each other very well), but the two channels are very different. Understanding the key differences between the two is an important step in helping you decide which approach aligns best with your business, budget, and goals.

Format and delivery

  • Direct mail: comprises physical mail such as postcards, brochures, flyers, letters, and catalogues sent directly to recipients’ postal addresses.
  • Email: Digital messages that are sent electronically to recipients’ email inboxes, which can include text, images, videos, and links.

Personalisation and tangibility

  • Direct mail: Offers a tangible experience, creating a sense of personalisation and authenticity, often resulting in higher recall and engagement.
  • Email: Can be personalised digitally through data-driven segmentation, but lacks the physical element that can enhance engagement.

Cost

  • Direct mail: Has higher costs because of printing, design, and postage, which may limit campaign frequency and audience reach.
  • Email: Typically low-cost, especially for bulk sending, making it affordable for frequent outreach and wide audience reach.

Response rates and engagement

  • Direct mail: Often has higher response rates because of its tangible nature and ability to stand out in a less cluttered space (mailbox vs. inbox).
  • Email: While response rates may be lower, email allows for continuous engagement through follow-up messages and drip campaigns.

Open and click-through rates

  • Direct mail: Open rates can be inferred by examining response rates, but it doesn’t provide real-time tracking.
  • Email: While response rates may be lower, email allows for continuous engagement through follow-up messages and drip campaigns.

Campaign tracking and analytics

  • Direct mail: Tracking is indirect, often using methods like unique coupon codes, phone numbers, or URLs to gauge effectiveness.
  • Email: Easily trackable with analytics tools that provide insights on opens, clicks, conversions, and engagement metrics.

Speed of delivery and reach

  • Direct mail: Requires longer lead times for production and delivery, so it’s less immediate and may not be suitable for time-sensitive campaigns.
  • Email: Delivered almost instantly, enabling quick adjustments, rapid testing, and fast deployment for time-sensitive communications.

Environmental impact

  • Direct mail: Has a greater environmental impact due to paper usage, printing, and transportation.
  • Email: More eco-friendly, as it’s a fully digital method with no physical waste.

ROI

  • Direct mail: Can yield a strong ROI, especially with highly targeted campaigns, but the initial costs are higher, which may limit frequency.
  • Email: High ROI due to low costs, with potential for continuous engagement through nurturing and remarketing, making it more cost-effective.

Audience reach and scalability

  • Direct mail: Best suited for targeted, localised, or high-value campaigns where personalisation is key.
  • Email: Ideal for broad reach and scalable marketing, allowing businesses to reach thousands or millions of people with minimal cost and effort.

These differences make each channel valuable in its own right, depending on the campaign goals, budget, and target audience preferences.

Despite the growing popularity of digital marketing, direct mail’s ability to stand out physically makes it memorable for recipients, and studies show that direct mail can foster stronger brand recall, especially among older generations.

Email marketing, while less impactful in terms of physical presence, provides businesses with an efficient way to reach a broad audience at scale. For small businesses with limited budgets, email marketing can be an attractive choice, yet direct mail’s tangible nature gives it an edge in building lasting connections.

Direct mail advertising examples that still deliver results

Direct mail advertising remains a powerful tool for businesses looking to engage their audience in a tangible, personalised way.

With the right strategy, businesses can achieve exceptional response rates and drive brand engagement and boost customer loyalty.

Here are several examples of direct mail campaigns that deliver results, along with supporting statistics and case studies:

Postcards with exclusive promotions

  • Example: A local bakery sends out personalised postcards announcing a “Buy One, Get One Free” offer for their new pastry line.
  • Effectiveness: According to the Data and Marketing Association (DMA), postcards boast an average response rate of 4.25%, compared to email’s 1%.
  • Enhancement: Adding QR codes or personalised URLs (PURLs) to these postcards can guide recipients to a landing page where they can redeem their offer online, track results, and gather customer data.

Personalised letters with strong calls-to-action (CTA)

  • Example: A financial services company sends out personalised letters offering free financial consultation sessions, including the recipient’s name and estimated savings based on their profile.
  • Effectiveness: Personalisation can boost response rates by 20%, according to a study by Epsilon.
  • Why it works: Recipients feel valued and are more likely to trust businesses that understand their needs.

Newsletters from real estate agents

  • Example: A real estate agency sends monthly newsletters with:
    • Updates on local listings
    • Market trends
    • Tips for buyers and sellers
  • Effectiveness: 70% of consumers believe direct mail is more personal than email, helping real estate agents build lasting client relationships.
  • Why it works: Highly targeted, localised and personalised newsletters can help establish estate agents as a trusted authority in the community, which is crucial in the competitive real estate market.

Sample products in direct mail

  • Example: A skincare brand sends small sachets of their new moisturiser, accompanied by a discount coupon.
  • Effectiveness: A national cosmetics brand reported a 30% sales increase after distributing samples in direct mail.
  • Why it works: Sampling allows customers to experience the product firsthand, increasing the likelihood of a future purchase.

Catalogues for retail and e-commerce

  • Example: A fashion retailer mails seasonal catalogues showcasing their latest collections, with a special section for exclusive in-store or online discounts.
  • Effectiveness: The DMA reports that 42% of recipients read or scan catalogues, with 25% making a purchase after viewing.
  • Enhancement: Adding QR codes can lead to virtual try-on tools or direct product pages for easy online shopping.

Augmented reality (AR) direct mail

  • Example: A travel agency sends out brochures with AR-enabled images. Recipients scan the images to view 3D tours of popular destinations.
  • Effectiveness: Campaigns that incorporate interactive features like AR can see a 35% boost in engagement, according to a study by the United States Postal Service (USPS).
  • Why it works: Enhances customer experience and significantly increases inquiries and bookings.

Holiday or birthday campaigns

  • Example: A coffee shop sends birthday cards with a “Free Drink on Your Special Day” coupon.
  • Effectiveness: Celebratory mailings create emotional connections. Studies show that customers are up to four times more likely to respond positively to personalised, occasion-based offers.
  • Why it works: Everyone loves something for nothing, and offering people a free gift upon redemption of a promotional voucher can drive immediate foot traffic as customers redeem their offers.

Nonprofit appeals with impact stories

Supporting statistics

Ultimately, the goal for any direct mail marketing campaign is to create memorable, personalised mail that engages and motivates recipients to take action. By understanding what works within direct mail advertising, small businesses can leverage this traditional channel to drive results that digital alone may not achieve.

Email marketing best practices to boost engagement and retention

To increase engagement and build customer retention, small businesses should implement email marketing best practices that focus on personalisation, timing, and relevancy.

With email marketing’s effectiveness dependent on delivering the right message at the right time, the following best practices and tips can lead to higher open rates and conversion rates.

Personalisation

Personalised emails typically show much higher engagement and conversion rates because they cater directly to the recipient’s interests and previous interactions.

For example, a small retail business might send personalised product recommendations based on previous purchases, browsing behaviour and user preferences, enhancing the recipient’s experience and increasing the likelihood of repeat orders.

Something as simple as using the recipient’s name in the email subject line and body can also yield much higher email open rates.

Segmenting email lists based on demographics or interests can also improve engagement rates by delivering targeted messages that resonate more closely with the target audience.

Finally, sending triggered emails, such as cart abandonment or post-purchase follow-ups, is a great way to recover lost orders and build brand loyalty.

Segmentation

Segmenting your email list ensures that recipients receive content that aligns with their specific interests or stage in the customer journey.

An email list can be segmented by many different methods, including demographics (age, gender, income, etc), geographical location, behaviour (purchase history, website activity, etc) and/or funnel stage (awareness, interest, consideration, intent, etc).

Whether you’re looking to convert visitors into subscribers or turn casual browsers into loyal customers, email segmentation is a powerful marketing strategy that can help you expand your customer base, build brand awareness and generate additional revenue.

A/B testing

A/B testing allows you to experiment with different elements of your emails to see what performs best.

When using A/B testing to determine the most effective marketing emails, it’s important that you only test one variable at a time, such as subject lines, CTAs, or images. If you make too many changes between each test, you won’t know which ones are responsible for the change in performance.

Timing and frequency

Timing is also crucial. Numerous studies have shown that sending emails at optimal times, such as early mornings or around lunchtime, often results in improved open and click-through rates.

Every social media channel and niche is different, so experiment with sending times and analyse performance to find the sweet spot.

It’s also wise to avoid sending too many emails to help prevent unsubscribes; a frequency of 1-2 emails per week often works well for most businesses.

Compelling CTAs

Your CTA directs the recipient on what to do next, whether it’s making a purchase, downloading a resource, or signing up for an event.

To maximise the effectiveness of your CTAs, ensure that they stand out and use action words like “Shop Now”, “Learn More” or “Claim Your Offer” to help boost engagement.

If possible, limit emails to one primary CTA to avoid overwhelming the reader.

Email design and layout

A visually appealing email can really help capture attention and enhance readability.

Use a clean, simple layout that guides the reader’s eye to the most important elements, and includes your company’s branding (logo, colour scheme) to build brand recognition.

It’s also important to balance text and visuals to keep the email engaging without overwhelming the reader.

Mobile optimisation

With the majority of emails being opened on mobile devices, ensuring your emails are mobile-friendly is crucial.

Use responsive design so emails display correctly on all screen sizes and ensure that you use large, easy-to-tap buttons for your CTAs.

Keep subject lines and preheader text concise in order to improve mobile visibility.

Finally, ensure that images load quickly and are appropriately sized for mobile.

Analysing direct mail vs. email open rates: what captures more attention?

When comparing direct mail vs. email open rates, it’s clear that each channel offers distinct advantages. Direct mail open rates are often higher due to the tactile nature of physical mail, which feels more personalised and credible to recipients. Research shows that direct mail open rates can range from 80% to 90%, largely due to the scarcity of physical mail compared to the high volume of digital messages.

Email marketing open rates, however, are typically lower, ranging between 20% to 30%. With inboxes flooded daily, it’s challenging for businesses to capture recipients’ attention. However, email campaigns allow businesses to reach a wider audience at scale and easily track metrics, which enables adjustments for future campaigns.

While direct mail naturally commands attention, email’s immediacy and ability to reach multiple touchpoints make it a powerful tool for reinforcing messages. Both strategies offer unique advantages for small businesses looking to connect with their customers, depending on whether they prioritise high open rates or broad outreach.

Exploring email marketing ROI vs. direct mail marketing ROI

ROI is a crucial metric for evaluating the effectiveness of any marketing strategy.

While both email marketing and direct mail can deliver impressive returns, their ROI profiles differ because of unique cost structures, audience engagement levels, and campaign dynamics.

Email marketing typically has a higher ROI due to its lower cost per email, ability to be automated, and ease of tracking. Small businesses can expect a solid return with limited upfront investment, making email an attractive option for those with budget constraints.

Direct mail marketing, though often more costly, offers a higher perceived value and can leave a lasting impression on recipients. Despite the higher initial investment, direct mail marketing ROI can be substantial when campaigns are well-targeted.

Direct mail marketing ROI: Tangible impact with long-term benefits

Direct mail marketing involves higher upfront costs than email marketing because of design, printing, and postage.

However, its ability to create a lasting, tactile connection with recipients can result in a substantial ROI when executed effectively.

  • Higher perceived value:
  • Strong response rates:
    • Direct mail has an average response rate of 4.9% for prospect lists and 9% for customer lists, according to the DMA. These rates far exceed the typical 1-3% click-through rate for email campaigns.
    • The tangible nature of direct mail ensures that it stands out, especially in today’s digital-heavy marketing landscape.

Email marketing ROI: High returns at a low cost

Email marketing is widely regarded as one of the most cost-effective marketing channels. Its affordability, scalability, and real-time tracking capabilities make it a go-to strategy for businesses of all sizes, especially those operating on restricted budgets.

  • Low Cost, high efficiency:
    • According to the DMA, email marketing delivers an average ROI of $36 for every $1 spent, making it one of the highest-performing digital channels.
    • Costs are minimal, typically involving email marketing platform subscriptions, content creation, and automation. With no printing or mailing fees, the per-message cost is negligible, even for campaigns reaching thousands of recipients.
  • Scalability and automation:
    • Email marketing allows businesses to send personalised, segmented messages to large audiences at scale. Automation tools enable businesses to set up drip campaigns, trigger emails based on user actions (like abandoned cart reminders), and conduct follow-ups – all without manual effort.
    • Automated campaigns have been shown to drive 53% higher conversion rates than onetime email blasts.
  • Real-time tracking and optimisation:
    • Metrics like open rates, click-through rates, and conversions can be tracked in real time. This data allows for immediate adjustments to optimise performance, such as A/B testing subject lines or refining audience segments.

Cost comparison and ROI context

While email marketing offers a higher ROI due to its lower costs, direct mail campaigns can deliver significant returns despite their higher initial investment. The key lies in understanding the cost structures and strategic applications of each channel.

  • Cost of email marketing:
    • Platforms like Mailchimp or Constant Contact offer plans ranging from $10 to $300 per month, depending on the number of subscribers and features.
    • Sending thousands of emails costs only a few pence per recipient, making it ideal for frequent communications.
  • Cost of Direct Mail:
    • Design, printing, and postage costs can range from £0.50 to £3.00 per piece, depending on the type of mailer and volume.
    • Despite these higher costs, direct mail’s ability to command attention often justifies the investment. When targeting high-value customers, the higher conversion rates can result in substantial revenue gains.

Combining email and direct mail for maximum ROI

For many businesses, the best ROI comes from integrating email and direct mail into a cohesive marketing strategy. Each channel complements the other, enhancing overall campaign effectiveness.

One popular way to combine the two marketing channels is to start with a direct mail piece to make a strong initial impression, and then follow that up with email reminders to reinforce the message and drive action.

Another strategy is to use email to gather customer preferences and interests, and then send personalised direct mail offers that align with their needs.

Direct mail response rates vs. email marketing conversion rates: a performance comparison

Direct mail response rates tend to outperform email marketing conversion rates, especially for personalised and highly targeted campaigns. Direct mail’s average response rate is around 5%, whereas email marketing conversion rates vary between 1% and 3%.

For small businesses, direct mail marketing effectiveness can be useful for reaching local customers, offering a tactile and tangible form of communication. In contrast, email marketing can cast a wider net, reaching a broader audience, and is well-suited for nurturing long-term customer relationships.

Evaluating the performance of direct mail vs. email marketing requires understanding how each approach aligns with campaign goals. While direct mail may yield higher individual responses, email marketing provides continuous touchpoints that encourage repeat engagement and brand loyalty.

Direct mail: high response rates for targeted campaigns

Direct mail consistently delivers impressive response rates, particularly for personalised and highly targeted campaigns.

  • Response rates:
    • The average response rate for direct mail is around 4.9% for prospect lists and 9% for house lists (existing customers), according to the DMA.
    • By comparison, digital response rates, including those for email, social media, and display ads, typically range from 0.6% to 1.2%.
  • Why direct mail performs well:
    • Tangible and personal: The physical nature of direct mail creates a sensory connection. Recipients can touch and hold the material, which lends a sense of legitimacy and personalisation.
    • Longevity: Unlike emails, which can be deleted in seconds, direct mail often remains in homes or offices, increasing the likelihood of future engagement. Recent studies show that 62% of consumers read or scan direct mail immediately, and 48% keep it for future reference.
  • Memorable impact: Physical mail has a 21% stronger recall compared to digital messages, according to a study by Canada Post, making it an ideal channel for brand-building or promoting high-value offers.

Email marketing: scalable and cost-effective conversions

While email marketing may have lower individual conversion rates, its scalability and cost efficiency allow businesses to achieve high returns overall.

  • Conversion rates:
    • Email marketing conversion rates typically range between 1% and 3%, depending on the industry and campaign type. However, with personalised, segmented campaigns, conversion rates can climb significantly – some businesses have reported rates of 5% or higher.
    • Click-through rates (CTR) for emails average 2.6%, but this varies by sector. For example, the ecommerce industry often sees higher engagement through abandoned cart emails, which boast a conversion rate of 10-15%.
  • Why email excels:
    • Low cost, high ROI: With minimal costs associated with sending emails, campaigns can achieve an ROI of $36 for every $1 spent. This makes email an attractive option for businesses looking to maximise returns without a substantial upfront investment.
    • Real-time engagement: Email allows businesses to engage with customers in real time. Automated workflows, such as welcome emails or post-purchase follow-ups, nurture long-term relationships and drive repeat purchases.
    • Dynamic and interactive: Features like personalised subject lines, embedded videos, and clickable CTAs enhance engagement and encourage immediate action.

Direct mail vs. email: a strategic comparison

Understanding how direct mail and email marketing perform in different contexts is key to leveraging their strengths.

Direct mail vs. digital marketing in today’s market

In the fast-paced, hyper-connected world of today’s market, small businesses face a critical challenge: how to stand out and connect meaningfully with their audience.

Potential clients often feel overwhelmed by the sheer volume of digital content they receive daily. From flooded email inboxes to endless social media ads, their desire is simple – genuine, relevant communication that doesn’t just blend into the noise.

The core problems clients face

Digital overload

Many consumers are suffering from “digital fatigue”. With an average of 121 emails received per day and constant exposure to digital ads, it’s easy for marketing messages to be ignored or forgotten. Clients often crave something tangible, a break from the constant barrage of screens.

Low engagement and trust

Digital marketing, while efficient, can sometimes feel impersonal. Automated emails and generic ads may fail to establish the trust needed for clients to feel valued. Consumers often desire personalised, meaningful interactions with brands.

Fragmented customer journeys

Potential clients navigate across multiple platforms – email, social media, search engines, and more – making it challenging for businesses to deliver a cohesive and consistent experience. They want seamless transitions between channels, where every interaction feels connected and relevant.

The desires driving client decisions

Personalised experiences

Customers are drawn to marketing that feels tailored to their needs. They want to feel understood, whether through a personalised offer in their mailbox or a digital ad that speaks directly to their current interests.

Convenience and ease of action

Whether it’s scanning a QR code on a postcard or clicking a link in an email, clients appreciate marketing that simplifies their decision-making process. They value clear calls-to-action that guide them effortlessly from interest to purchase.

Tangible value

While digital ads and emails provide instant information, tangible items like direct mail offer a sense of permanence and credibility. Clients desire something they can physically hold and revisit, reinforcing brand trust and recall.

How combining direct mail and digital marketing solves these problems

Rather than choosing between direct mail or digital marketing, businesses can harness the strengths of both to create a seamless, engaging customer experience.

Direct mail: a catalyst for engagement

  • Addressing digital fatigue: Direct mail offers a physical touchpoint that stands out in a crowded digital space. Unlike an email that can be deleted in seconds, a well-designed postcard or letter demands attention.
  • Building trust: Receiving a personalised mailer often feels more thoughtful and credible than an automated email, fostering trust and brand loyalty.
  • Example: A boutique clothing store sends beautifully crafted postcards showcasing their new collection. These postcards feature a QR code that leads to an exclusive online catalogue, blending the tactile appeal of direct mail with the immediacy of digital engagement.

Digital marketing: expanding reach and reinforcing messages

  • Follow-up and retargeting: After an initial interaction through direct mail, digital marketing tools like email or social media retargeting ads can keep the conversation going. This ensures the brand remains top-of-mind without overwhelming the customer.
  • Data-driven insights: Digital channels offer invaluable data on customer behaviour, allowing businesses to refine their campaigns. Email open rates, ad clicks, and website visits can inform future direct mail strategies.
  • Example: A local gym mails out a free trial offer. Those who don’t immediately redeem it are targeted with follow-up emails and social media ads reminding them of the offer, creating multiple touchpoints to convert interest into action.

Creating a seamless multi-channel journey

Integrating direct mail with digital marketing provides a cohesive customer journey. Each channel complements the other, reinforcing the brand’s message and guiding the customer toward conversion.

Tactical synergy:

  • Start with a direct mail piece introducing a promotion or new product.
  • Use email and social media ads to reinforce the message and provide reminders.
  • Leverage direct mail again for follow-ups, such as thank-you notes or loyalty rewards.

The impact of a balanced approach

By blending direct mail with digital marketing, businesses can:

  • Enhance brand visibility: Direct mail creates a lasting impression, while digital channels ensure continuous engagement.
  • Improve customer retention: Repeated, personalised touchpoints across channels foster loyalty.
  • Boost conversion rates: Customers who interact with multiple channels are more likely to convert. According to a study by the DMA, campaigns that integrate direct mail with digital marketing see a 28% higher conversion rate than single-channel efforts.

Wrapping it up

Both direct mail and email marketing offer powerful benefits for small businesses, with each channel catering to specific objectives.

Direct mail remains effective for establishing memorable connections, while email marketing’s cost efficiency and automation make it ideal for regular customer interactions.

Combining these strategies can optimise outreach, providing small businesses with an effective way to engage prospects and customers while remaining within budget.

When to use direct mail

Direct mail is particularly effective for campaigns that require a personal touch, a memorable impact, or localised targeting.

  • Best use cases:
    • Customer acquisition: For businesses targeting specific geographic areas, direct mail can help establish a strong local presence.
    • High-value promotions: Organisations within the real estate, non-profit, financial services, luxury retail and political sectors benefit from direct mail’s ability to convey exclusivity and build trust.
    • Events and announcements: Invitations, grand openings, and product launches often perform better through direct mail due to its tangible nature.

When to use email marketing

Email marketing shines in scenarios requiring frequent communication, broad audience reach, and detailed performance tracking.

  • Best use cases:
    • Customer retention: Email is ideal for nurturing relationships, offering personalised recommendations, and keeping your brand top-of-mind.
    • Time-sensitive promotions: Flash sales, seasonal offers, and limited-time discounts are easily communicated through email’s real-time capabilities.
    • Data-driven optimisation: Use email to test and refine messaging strategies, ensuring continuous improvement in engagement and conversion rates.

Key takeaways

  • Email marketing:
    • ROI: $36 for every $1 spent.
    • Strengths: Low cost, high scalability, real-time tracking, and automation.
    • Best for: Frequent, broad communication and nurturing existing customer relationships.
  • Direct mail marketing:
    • Response rates: 4.9% to 9%, significantly higher than email.
    • Strengths: High perceived value, lasting impact, and strong brand recall.
    • Best for: Personalised, high-impact campaigns targeting specific, high-value audiences.

Both direct mail and email marketing offer unique advantages depending on your business goals. While direct mail excels in capturing attention and driving immediate responses, email marketing provides scalable, cost-effective solutions for ongoing engagement.

By understanding the unique strengths and ROI potential of email and direct mail marketing, businesses can craft smarter, more effective campaigns that balance cost-efficiency with high engagement and conversion.

Next steps

Contact Mailing Expert to find out how direct mail marketing can help you grow your business.

/ By James Golding / Direct Marketing/ • • / 0 Comments