A direct mail company, On-Card Inc. is offering pay-per-response direct mail. Buyers bid what they think a response would be worth, and On-Card runs the campaign (buyers must also pay postage). This is more like online advertising than traditional pay-per-piece direct mail.
The bid/response mechanism could probably use some work, but this seems like a much better way to align incentives– the vendor has incentives to keep costs down and response rates high– and buyers don’t have to worry about spending huge sums of money without any return.
You’re right–this approach does align buyer and vendor incentives. ON-CARD test campaigns are proving that such an alliance produces remarkable results: 8% for a retention program, 6% for a lead generation effort, and 4% for a B-to-B prospecting campaign. Compared to the average 0.5% response generated by traditional direct mail, ON-CARD offers a signficant performance increase, in addition to a risk-free, value-based pricing model for direct mail. Results of ON-CARD campaigns can be viewed at http://www.on-card.com/