Direct mail is still a very valuable workhorse for lead generation but I don't think you can make this statement across the board for all companies like you could have in years past. In fact, I think all direct response has changed significantly with the addition of new messaging channels, such as social media.
Today, direct mail (and email perhaps) needs to be extremely relevant and personalized. In the old days the ratio of importance might have been 60% list, 20% creative, and 20% offer. Now I think it's more like 80% list, 40% creative and 20% offer (I know the math is fuzzy but you get the point).
You also need to factor in that you're competing with tons of competing channels and messages, so consider digital printing to add personalization or dimensional formats to break through the clutter.
Also today you'd better be prepared to use direct mail as PART of an ongoing communication plan and not as an isolated vehicle.
Direct mail works very well, if you do it right. It's all about targeting and creating an engaging message. And, it doesn't just have to be about a discount. It could be sending a small gift to spark a conversation. We need to look at our written communications as sales starters, not always closers. People still like dealing with people.
To simplfy things what's working today is what always works:
1. A great offer.
2. Great copy.
3. Great list selection.
Direct mail is still the most trusted medium you can use to reach new prospects and existing customers.
The biggest problem facing direct mail is when one, two or all three of the ingredients above are missing.