For many businesses the days of massive direct mailings are over. The increased costs of printing and postage for large direct mail efforts are simply prohibitive. But does the size of a mailing really matter—or can direct mail be effective on a smaller scale?
Let’s be clear about something: When you reduce a mailing from 100,000 pieces down to 5,000 pieces you lose economies of scale. Your per-piece costs for services such as creative, design, printing, and mailing can go up pretty dramatically.
Unit cost, however, isn’t the only thing you should be considering. After all, you’re goal in doing direct mail (or any kind of marketing) isn’t to save money—it’s to generate leads. Of course cost is a factor—but unit cost shouldn’t be the only factor driving your decision. Return on investment (ROI) is a much more important factor. And sometimes a small mailing—with a high per unit cost—can be extremely effective.
Here’s an example a colleague shared with us of a small mailing he worked on for one of his clients. The client (in the enterprise software industry) had worked hard to put together a list of extremely qualified leads. They further narrowed this list down to the top 50 potential clients they wanted to contact. These 50 prospects (all ultimate decision-makers) received a Federal Express package that included an expensive brochure, a letter, and something rather unusual in direct mail circles: A pre-paid cell phone, programmed to work only between the prospect and the software company.
As you can imagine, the cost-per-piece on this mailing was off the charts by conventional direct mail standards. But the pay-off was equally large. The first response not only paid for all of the preceding marketing costs, but also netted the company a huge ongoing profit (it resulted in a multi-year deal).
The point of all this is not that you should start sending cell phones to your clients, or that you should look for the most expensive direct mail package you can find. The point is that by really nailing down their list to the right people, and by not getting hung up on unit costs, the campaign was extremely successful.
What does that mean for the rest of us who may not move in those high-dollar circles? We still need to calculate the cost of a mailing. What will we spend on the list, the creative, the printing, mailing, and postage? What kind of response can we reasonably expect—and what is that expectation based on? When you multiply the number of responses by the average revenue generated, does the campaign cover its costs—or even make money?
It’s not the size of the mailing that really matters. It’s what kind of response your mailing generates—and whether that response justifies the cost—that’s important. Direct mail is still a powerful marketing tool—if you do it properly. If you’re looking for concrete ways to do that, I encourage you to download our free 21 Tips to Improve Your Direct Mail Program white paper. These tips will help you create better direct mail programs—no matter what size mailing you have in mind.