I will not exaggerate if I state that the first and the most asked overall question in our industry is “how much?” What would cost me to create and execute a successful direct mail campaign?
So, how to determine the direct mail costs? There is not a simple or immediate answer. Direct mail is one of the major direct marketing channels. Its elements are complex and with so many variables, that it is virtually impossible and quite irresponsible to answer fast and one-sided on such question.
But enough with the inexplicit talk, I will try to summarize the cost of the direct mail in few sections, which the entire direct mail cost is comprised of.
What is the primary purpose of your direct marketing efforts? Lead generation; Increase sales; Brand recognition; Customer engagement. Defining the goal is critical, and that will determine the correct selection and development of all elements of the campaign - mailpiece, mailing list, design, the frequency of delivery, etc.
There are lots of different products and packages that can be mailed, but the most common and widely used are: postcards, brochures, envelopes packages, snap-packs. There is also multipage booklets or catalogs, dimensional and other unconventional mailpieces which we will not discuss in this article. Printing any mailpiece or package can vary anywhere from 3 pennies up to a dollar. I know it is a pretty broad range, but again, the variations are numerous. On the top of the product choice, the size and quantity printed in particular are critical for the final price. In general, postcards cost vary between 3¢ and 8¢. Brochure printing runs between 6¢ and 18¢; USSeals™ (snap-packs) 15.5¢ - 25.5¢; Personalized envelope packages starts at 17-18¢ per piece and can go to 50¢ and more for packages with a lot of inserts. You have to be mindful though when choosing the size of the mailpiece, yes the smaller size will cost less, it is not necessarily the best choice for your particular campaign. As a general rule, larger quantities generates a lower cost per piece.
III. Mailing List
Do you have your own mailing list or you need to rent or buy one? How to select and process the right mailing list is not the subject of this article, so we are not going to dive into details. But in any way, there is a cost involved in the handling of the mailing list - whether it is the cleaning and hygiene of your list or acquiring a prospect’s mailing list. The prices for the mailing list a much less complicated. The occupant / residential lists start @ 1 ¢ per record; the consumer list start at 3.5¢ per record, and the business lists start at 4.5 ¢ per record. All the prices I mentioned are for a basic list and large quantity. Usually, you will pay a penny or two extra for fewer amounts requested. If you need a special or response data files be ready to pay anywhere from 10-15 ¢, in some cases up to a $1 per record for highly targetted response lists.
IV. Design & Copywriting
Even though design and copywriting expenses are a relatively small portion of the entire budget, a lot of marketers love to save pennies on these critical elements and jeopardize the success of the whole direct mail campaign. Unless your company has its own marketing department, it is always a good idea to use trained help for designing and copywriting your direct mail package. The average prices for creating or writing a direct mail piece are from $75 to $450 per layout created or text written, depend on complexity and type of the mailpiece.
I don't want to be boring or repeat myself, but I have to. There are virtually limitless possibilities and variations to design, plan and execute a successful direct mail campaign. All these variables will affect the total price of your campaign. Combining digital elements will raise the overall total of the campaign significantly, but the result will confirm its worthiness. Personalizing your letter or postcard will cost few extra pennies. Personalizing not only the salutation but incorporating more merge fields throughout the copy will increase the price even more. Matching the inserts with the outer envelope (if requested) will make the mailing production more difficult, time-consuming and therefore a lot more expensive. Using luxury or expensive papers will definitely increase the final cost, but for some campaigns, it is an absolute must. Adding any printing enhancement like spot UV coating, silk coating or foil stamping, will do the same. Incorporating detachable cards, scratch-offs, or repositionable labels will clearly add to the prices, but the reward could be times bigger than the little extra cost.
Finally ... we are close to the end of the estimating steps.
As easy as it seems the postage sometimes can be tricky to determine. Postage is the element, that undoubtedly, you have to rely on professional mailers to generate the final amount so you can get the greatest discount possible for your particular mail. The average standard postage rate for pieces up to 3.3 oz range from less than 8¢ a piece for a saturation nonprofit mail to almost 54¢ for a flat-size piece with mixed presorting. Of course, the first-class postage will yield higher rates. The pieces weighing more than 3.3 oz will have an extra charge per pound on the top of the base piece price. If some of the terms sound not familiar or not in English, that confirms my advice - use professional mailer! In most of the cases, they will save you more time and money than if you do the DIY project.
VII. Return on Investment or ROI of The Direct Mail
It will not be accurate to calculate direct mail cost without taking into account the Return on Investment. At the end of the day, it doesn't matter how much your campaign cost, but what is the return you are getting. If spending few extra bucks, will give you a return of 20% or 25% more, then it is not brainer that putting the additional resources will pay off. According to the DMA 2015 Response Rates report, Direct Mail still yields one of the lowest acquisition cost per lead. Probably that is the reason why Direct Mail is still running and produces results greater than ever!
I know you have read tons of similar articles and none of those answer your question “How much will my direct mail campaign cost?”. To make your life easier, we have created two very useful tools: a direct mail cost estimator and the direct mail ROI calculator, use them together or separate. The estimator is not a quote or precise calculator, but it is accurate enough to help when you plan and prepare the budget for your next direct marketing campaign. If you still have questions or concerns, which I am sure you will, please contact one of our marketing specialists for assistance.
#DirectMail still yields one of the lowest acquisition cost per lead.