Cost of Direct Mail

by Will Schneider

So you’re considering sending out a direct mailing to prospects and/or customers? Before you take the plunge, it’s important to understand what’s involved in the costs and also what the expected return on investment would be for the mailing.

As for the costs involved, you’ll be looking at two main components when doing a direct mailing. First are the costs related to printing the mailing. This cost varies depending upon the type of mailing, whether that’s a letter, post card, or other type of correspondence. Other things that can impact the cost of the printing are the type of the stock of paper you use (higher quality will cost you more), as well as whether or not you choose to use color instead of black and white. And finally, with regard to printing, you can either choose to do a self-mailer (which does not require an envelope), or insert the direct mail piece into an envelope or box, depending upon what it is.

Second are the costs related to actually sending the direct mail piece in the mail. Of course, this will depend upon the size of the piece.

So should you proceed with your direct mailing? That really depends upon the potential return on investment! In order to determine the return on investments, you have to compare the cost of direct mail to the expected return. Return can be quantified  in terms of how much business you can expect to get from the mailing. The latest averages indicate that around 1.75% of all direct mail ends in a sale. So for every 100 pieces sent, you might get 1 person to purchase.

The last step in determining whether or not to use a direct mailing is to calculate your potential sales that could take place and compare that with the costs of the mailing. So if your average sale is $100, and you expect to send 100 direct mail pieces, of which 1 will purchase, your total sales would be $100. If the costs of sending the direct mail piece is $50, then your return on investment is $50.

Knowing the costs involved and making a decision based upon potential return on investment will help you make wiser decisions regarding direct mailings.

This entry was posted on Wednesday, March 28th, 2012 at 10:08 am and is filed under Small Business Resources.