The letters market can be broadly segmented into three types of mail: transactional mail, promotional or direct mail, and social mail.

	Transactional mail, which involves a transaction between businesses and their customers (i.e. mailings of accounts, bills, statements and cheques), makes up approximately 79 per cent of all letters.
	Promotional or direct mail (i.e. marketing communications) makes up about 16 per cent of all letters.
	Social mail (i.e. letters, postcards and greeting cards between private individuals) makes up around 5 per cent of all letters.

In the world's rapidly changing messaging market, the letter is competing with electronic messaging, such as the Internet, e-mail and SMS. Combined with mass media channels, the range of mediums available has created new opportunities for businesses to communicate with their customers - as well as confusion about what is effective.

To explore this issue, a ground-breaking research study was undertaken in 2005/06 (with results released in July 2006). Conducted by internationally renowned marketing academics Professors Peter Danaher and John Rossiter, the research encourages businesses to understand how the communications channels they choose (including mail, e-mail, phone, SMS and mass media channels) will have an impact on customer behaviour - and on their bottom-line results. Australia Post sponsored, but was not directly involved in, the research.

The study shows how consumer preference for receiving information via particular channels directly influences them to take action (for example, to buy a product or pay a bill on time).

With the research comparing the effectiveness of paper-based and electronic channels for both transactional and promotional information, key results included the following.

	For promotional information, recipients (at home and at work) said that printed direct mail would be more likely to influence them to buy something than e-mail, phone or SMS.
	When it came to transactional information, household recipients were more likely to pay their bills on time when they received them via mail, as opposed to e-mail or SMS.
	People who received bills in the workplace were also more likely to pay them on time if they received them by mail rather than by e-mail. The difference, however, was not as significant as it was for home receivers, indicating that people are more averse to receiving transactional-based e-mail at home than at work.
	Personally addressed letters sent to residential recipients outperformed e-mail on all of the attributes (“enjoyable”, “entertaining” and “reliable”) that influence a product purchase.