One of the most common questions we get about direct mail is how much it will cost. The answer, unfortunately, is not as simple as we’d like it to be, but we’ll explain why, as well as how you can weigh the cost versus value of direct mail for your own business.
Factors That Influence Direct Mail
Like any complex process, from designing a website to building a house, there are many factors that affect the cost of your direct mail campaign, and these will vary from campaign to campaign and from company to company. Some of the factors that will influence the cost of your campaign are:
- Whether you already have a list of prospects or whether you need to purchase or rent a list in your target areas. Because it can take time to build a list, many companies choose to jumpstart the process by outsourcing this initial step, but that will add to the cost of the campaign.
- The size of your target area. Of course, the more pieces you print and mail, the more your campaign will cost.
- Design and copywriting services. If you choose not to provide your own graphics and copy, your direct mail company might be able to provide them for you, but there will be design and writing fees to consider.
- The type of printed materials you’re sending. Size, paper, finish, colors, quantity and quality can all impact on the cost of printing, and those costs may influence the campaign you’re planning.
- The cost of postage. Delivering your mail to recipients is another cost influencing the overall price of your campaign.
Calculating the cost of a direct mail campaign is a complex process involving a variety of fixed and variable costs. The best way to be sure of what your campaign will cost is to get a quotation on the campaign you have in mind. Once you have that, the next part of the process comes into play: determining whether the cost versus value makes sense for your marketing strategy.
Cost vs Value in Direct Mail Marketing
As with any type of marketing, the ultimate deciding factor for most companies will not be the price of the campaign, but the return on investment.
In our experience, unless your company is already a household name, like Pizza Hut, and you’re sending out coupons that are guaranteed to bring you sales, the best way to determine whether direct mail makes sense for you is to estimate the cost per sale versus the average sale value.
If, for instance, your direct mail campaign will cost $2,000, but you own a homebuilding company and the cost of that campaign could net you $400,000 or more per sale, then the cost of each sale will be less than 0.5% of the sale price. If you’re making 10 or 15% on each sale, that’s a no brainer.
If, however, you’re trying to sell items that have a low cost and a thin margin, then the $2,000 cost of the campaign may not be worthwhile, except perhaps as a branding outreach exercise.
If you’re not sure where you fall on the scale of cost versus value and you’d like to discuss marketing strategy and options, be sure to drop us a line. We’re always happy to help our clients find the best fit for their marketing needs and goals.