What is EDDM and how does Every Day Direct Mail work? Every Door Direct Mail®, known simply as EDDM®, has received a fair amount of attention since it was introduced in 2011 and is prominently featured on the U.S. Postal Service’s® website. If you have visited the USPS® website and explored EDDM then you’ll know the USPS has provided a robust mapping tool for geographic targeting with demographic information provided by the U.S. Census Bureau.
The USPS says that EDDM is a good fit for some businesses but not a good fit for others. More specifically, the USPS acknowledges that it is good for some direct mail marketing communication purposes but not for others. So, whether you are a small business owner, marketing coordinator or even a marketing manager in a large company, you need to understand EDDM’s strengths and weaknesses. In today’s highly competitive marketplace, it’s important to know when EDDM is the right direct mail tool and when it should be set aside for other alternatives.
It is also important to be increasingly discerning because, as the saying goes, “the marketplace always speaks” and business owners and marketers need to hear what it is saying. What do I mean? The use of EDDM is waning as marketers choose other direct mail options. EDDM use peaked in 2013 at 2.04% of Standard Mail. However, it has been on the decline ever since and only accounted for 1.66% of Standard Mail in 2016. The decline isn’t just in percentages of another option. Rather, actual EDDM volume has declined every year since 2013 when it peaked at 975 million pieces. Since then, it dropped 17% to 810 million pieces in 2016 even though the economy improved. Comparing EDDM with other direct mail options, First Class pre-sorted mail declined by 11% because marketers are increasingly moving into Standard Mail. Netting out the First Class and EDDM shifts, Standard Mail declined by only 2% in the same time period as marketers sought to strike a balance between direct mail and digital marketing.1
Even considering these trends, EDDM is right for some businesses and in some situations. Fortunately, it only takes a basic understanding of EDDM and alternatives to make the best decision. So, let’s begin with a little background information about EDDM and an understanding of how it works. From there, let’s explore EDDM costs, examine some alternatives and use them to evaluate EDDM’s merits in different scenarios. As we examine the pros and cons objectively we will conclude with a return on investment framework that I believe even the USPS will agree is sound. The USPS has your best interest in mind because it is definitely interested in having you as a repeat user of direct mail.
As I mentioned, EDDM was introduced in 2011. The USPS had taken a beating during the recession that began in 2008 and it was experiencing a significant decline in direct mail volume as businesses everywhere slashed advertising budgets. At the same time, digital marketing methods were aggressively ramping and businesses of all sizes were embracing it. The USPS needed to provide a low cost direct mail option and the path it chose was to bypass its regular mail processing infrastructure as much as possible. It determined that there are some cases where geographic targeting is all that is necessary for businesses to achieve successful results. For example, a local pizza parlor offering coupons to households within a close proximity does not care about addressing its advertising pieces to specific people nor does it care about demographics such as income levels, education or even age. A pizza parlor understands that a good percentage of the population likes pizza and distributing flyers is good enough. The same holds true for other local businesses and organizations that are candidates for a flyer distribution service. By bypassing its processing infrastructure and leveraging its carriers, the USPS determined that it could offer a valuable, low cost solution for a postage price that was one-third the price of a First Class stamp.2
In Part 2 of this series,I'll explain how Every Day Direct Mail works, explore a significant unintended consequence of EDDM and provide a comprehensive method of examining the true costs of Every Door Direct Mail vs. alternatives to help you when making direct mail decisions.
1. 2012-2016 USPS® 10-K Financial Reports to the United States Postal Commission
2. The original retail rate for EDDM was 14.5 cents and the rate for a First Class postage stamp was 45 cents. The present rate for EDDM is 17.7 cents retail and 15.6 cents bulk mail rate.