A letterhead and envelope is another way of branding. It is your name on the line. Properly designed they can indicate to people that you care about the quality of your own presentation. They can be printed on many different papers and should be done using your company colors.
Even though we are moving faster and faster into a paperless society, letters are still sent. I agree it costs more to mail something than to send an email, but more people still prefer reading a sheet in their hand instead of an email on a screen. Plus the quality of print and paper used can be a good branding tool. Another thing to remember is that sometimes a printed letter is required instead of an email for legal reasons.
As with postcards and brochures, a letter mailed can be a great way to tell someone about your business, especially if they don’t have email.
You probably already know this, but it bears repeating that when mailing a letter to a potential client for the first time it is a good idea to address it to the correct individual by name, if possible. That gives that person the idea that you have done some research about their company.
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