One of the primary arguments against direct mail is the cost to get the campaign going. There are printing costs, postage costs etc, but looking at your direct mail budget as an expense is slightly flawed. View a direct mail budget as an investment not an expense since you should get your budget back in new sales. Measure the success of a direct mail campaign by measuring your return on investment (ROI). Does it really matter if you spend $10,000 on this month’s mailer if it brings you $25,000 in new business? It does if you don’t have $10,000 to spend.
There are a number of ways you can get that initial investment down so you can increase your ROI and make direct mail more affordable.
What can you do with your data list to prevent wasting money?
1. Don’t mail to people who don’t need your product – The single most effective way to keep costs down in a direct mail campaign is to reduce the number of people on your data list. Don’t mail to a general list. Every contact you mail to who don’t/can’t/won’t use what you are offering is a waste of money so you need to target your mailings. When you talk to a list broker make sure you are targeting demographics that are likely to care about your advertising. Don’t market a Mac Power Book to Bill Gates or pool cleaning services to someone who doesn’t have a pool.
2. 81¼A Goose Chase Circle Nowhere USA – It doesn’t matter if you buy, rent, or collect a list from customers you waste money with every direct mail piece sent to people who are no longer there. Delivery Point Validation (DPV) should be part of every data list process before your first stamp gets licked. Not that I suggest licking stamps. We have machines for that these days.
3. Jack moved last year –Before you apply your postage you need cross reference your list against the National Change of Address (NCOA). There is no reason to send Jack Hill’s mail to Jill Crown. You are just going to give Jill a headache and waste some money that could have been used to get Jack to buy the in-home water purification system.
Printing costs are second only to Postage costs so what can be done to keep those under control?
1. 11×17 Yeah, that will get their attention! – Paper is the number one cost of printing. The more pieces you get out of one sheet of paper the cheaper your mailer. It sounds simple but make sure you and your graphic designer know how your project is getting printed. Will it printed on a sheet fed printer or a roll printer? What the starting size of the paper? What is the usable print area? This simple series of questions should be asked before ink meets paper to keep cost down and efficiency up.
2. Gold leaf is pretty… – Paper quality directly affects the way your potential customer will persevere your product and company so you don’t want to use newsprint, but there is no reason to use the most expensive stock on the market. Ask about your paper options. Most printers have an in-house paper stock that they buy in great quantities so they get a very low price on it. Plus it’s probably very well suited for direct mail, and the finishing processes that add a professional touch.
3. What do you mean 4 color process , my mailer only has green on it? – Full color printing, aka 4-color process printing uses four colors of ink (Cyan Magenta Yellow Black) to recreate the spectrum of color we see. It’s needed if you want to print photos or more than 3 different colors on you mailer, but could you get your message across only using one, or two colors? Design your mailer using 1 or 2 spot colors an you could save money depending on how the piece is printed.
The big expense of a direct mail campaign is postage, but all postage is not the same.
1. First class or standard – The most obvious option you have is the class at which you want your mail to travel. First Class mail is the more expensive of the two, and it usually gets delivered in 1-2 days. It’s more likely to get opened since postal employees are instructed to make every effort to deliver fist class mail even if there is a missing component in the address. Standard Mail is less expensive, and delivery times vary between 2 -9 days. This is fine for anything that is not time sensitive but don’t use it if you want your mailer to get to an address on a certain day. Another concern is that the USPS doesn’t guarantee the delivery of standard mail. If the mail is undeliverable it’s likely that it will just get thrown away without notification.
2. It’s shaped like a teddy bear -The size and shape of your mailer affects the cost. There is nothing more frustrating that realizing you could have saved $0.13 per mailer if you would have reduced the size of piece by 1/8th of an inch. I know $0.13 doesn’t sound like much, but if you are mailing 2,500 pieces a week that adds up very very fast. Asking if you could get lower postage rates by making a small change to the size or shape of a mailer is always a good idea.
3. All postage is NOT the same, wait I said that already – A good mail house knows techniques that will reduce the cost you have to pay for postage. The USPS will discount postage costs if part of the work of delivering the mail is done before it gets into their hands. Ask about Co-palletization and Commingling to get volume discounts. Ask if you can get automated pricing. Ask about ways to save money. Postage costs are too complicated to explain in a blog post, but if you have questions leave me a comment and I will answer.