Direct mail has proven to be an effective marketing tool for both small and large businesses. Today, the ability to target customers directly with your direct mail campaigns has significantly increased the ROI provided by this strategy.
But, as a business owner, you need to know all the facts to make a decision. So, how much will a direct mail campaign cost? And is direct mail still effective?
Let’s take a look!
Like many things, it depends.
The price of a direct mail campaign will vary based on the level of customization required, the type of mail being sent out, how targeted you need the campaign to be, and how much of the project you can complete in-house (design, copywriting etc…) compared to how much you need to outsource.
Assuming a minimum order of 1000 pieces, direct mail can cost anywhere from $0.50/piece for a basic postcard to $2.50/piece for a highly personalized piece with custom finishing. However, if you require copywriting and design, you can expect to pay around $0.20 extra per piece.
Keep in mind, most print providers will provide a bulk-discount on orders that exceed a certain volume or if you agree to work together on an ongoing basis.
However, if you only require a small number of direct mail pieces, you can expect to pay a higher rate per piece. With that said, as long as you make sure your campaign is highly personalized, you can still see an impressive ROI from short runs. In fact, sometimes small, targeted short runs provide a better ROI compared to large, generic runs!
This means the price range for a direct mail campaign can be very broad, depending on your unique needs. Later in this post, we’ll take a look at a specific example to help you get a better idea of the cost of direct mail.
But first, what are the costs associated with running a direct mail campaign?
Now that you know approximately how much direct mail costs, you might be wondering what expenses make up the price.
There are a number of phases to each direct mail process that are factored into the overall cost. Let’s take a look at a few of the things that need to happen to make your direct mail campaign a success.
Depending on how many of these expenses you can manage in house versus how many you need to outsource, you can expect to spend approximately $0.50 to $2.50 per piece to cover the cost of your direct mail campaign.
Now that you know some of the general costs associated with direct mail, how much should you spend on your campaign?
Should you be on the higher end of the price range or the lower end?
This answer depends largely on your goals. For example, if you’re looking to send out a general brand awareness campaign, you can expect to pay less compared to a highly personalized campaign targeted towards high-value customers.
This is simply because it’s much more time-intensive to send out targeted, personalized mail.
However, it’s important to remember that the cost of each piece of direct mail isn’t the only factor to consider. Instead, you should look at the campaign’s potential to generate revenue.
For example, let’s say you run two separate direct mail campaigns at the same time:
For campaign 1, you purchase 1000 pieces of direct mail at $0.50 per piece, for a total cost of $500.
Campaign 1:
1000 pieces x $0.50/piece = $500
For campaign 2, you purchase 1000 pieces of direct mail at a price of $1.00/piece amounting to a total cost of $1,000:
Campaign 2:
1000 Pieces x $1.00/piece = $1,000
However, because you spent more on campaign 2, it can be more personalized and targeted towards your ideal customers, resulting in a higher response rate.
With that in mind, let’s say campaign 2 yielded a 10% response rate, which is 1% higher than the direct mail average of 5-9%.
Campaign 1, on the other hand, performed below industry standards because it was less personalized, and only yielded a response rate of 3%.
This means that campaign 1 only generated 30 responses, at a cost per response of $16.60 ($500/30 responses = $16.60/response).
Campaign 2 generated an impressive 100 responses, at a cost per response of just $10! ($1,000/100 responses = $10/response).
Both performed well when compared to the average response rate for email marketing (1%), however, you can see campaign 2 significantly outperformed campaign 1 and cost you $6 less per response generated.
Had you made your decision solely based on the price per 1000 pieces of direct mail, you likely would have chosen campaign 1. Upon closer consideration, you can tell campaign 2 would be most profitable, even though it is double the initial cost of campaign 1.
When planning a direct mail campaign, always remember to consider your cost per-response rather than just the cost-per-piece.
With today’s technology, many people assume that email marketing is much more effective than direct mail. However, this simply isn’t true. There is an abundance of evidence that shows direct mail is actually more effective when compared to email marketing:
Here’s why direct mail marketing has been able to continually provide a competitive ROI in an increasingly digital, smartphone-centric world.
Want the best of both worlds?
While direct mail has been proven to be more effective than email marketing, why not use both? This will ensure your message has the best chance of reaching your target audience, wherever they may be. This is called a multi-channel approach and is a very effective way to maximize your business’s marketing ROI.
For more information on a multi-channel marketing strategy that can elevate your business’s marketing success, contact us!
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