Often the first question marketers considering direct mail ask is “How much does it cost?”
Estimates for direct mail campaigns can vary greatly, and it often seems like there is some magic involved in the calculation of direct mail prices. Add to that the way direct mail advertising costs are presented, as they can be highly variable. Quotes may include direct mail cost per 1000 while others will itemize charges down to the smallest detail. It can easily get overwhelming to navigate the process and costs.
How Much Does Direct Mail Advertising Cost Per Piece?
Typically, most marketers will end up spending between $.50 and $3 per piece on a direct mail campaign. This is before “soft costs” such as time are factored in.
So, how do you estimate direct mail cost? Traditional direct mail advertising costs involve multiple vendors, each with several pieces that they deliver in a pretty complex project. Factors that impact the cost of direct mail include:
- Volume
- Design
- Copywriting Costs
- Quantity or Mailing List Size
- Postage Rates & Choices
- Format Selection (Cost of paper, ink, printing & handling)
How Much Does Direct Mail Cost Per 1000?
Cost per thousand, or CPM, is the way that advertising is measured. It is the price of an advertisement to a per unit cost for 1,000 “impressions”. Interesting fact – the “M” in CPM stands for “mille”, which is Latin for thousands. To calculate direct mail cost per 1000, take the total cost of the campaign and divide by 1,000.
Many new software tools and printing companies simplify the direct mail process significantly and there are fewer things that can impact the cost of a direct mail campaign, potentially resulting in savings. Higher list volume can also work in your budgeting favor.
For example, if it costs a printer $1,000 for the equipment and their team to spend four hours on a campaign, at a minimum:
$1,000 divided by 10,000 pieces puts the fixed costs at $0.10 per piece.
$1,000 divided by 500 pieces puts the fixed costs at $2 per piece.
This is why you don’t see many “small batch” or “triggered direct mail” being produced by traditional printer/mailers and agencies. But newer direct mail automation tools can address this by bundling the volume of multiple clients using the same creative formats together. This way a printer could do a run of 6×9 postcards that might include a single triggered postcard from one client, a small batch of 50 from another, a campaign of 250 from another, and so on. They can get to that 10,000 piece per run, by aggregating lots of small campaigns through software, therefore keeping fixed costs low per piece.
Direct Mail Costs are Offset By High ROI
Direct mail remains one of the most reliable forms of advertising in the world. The cost of a direct mail campaign is a fraction of the return it brings and while mail volumes peaked in 2008 in the U.S., direct mail is coming back in the marketing world, because it works.
Direct mail has response rate of 5.1%. Compared to 0.6% from email, 0.6% from paid search, 0.2% from online display advertising, and 0.4% from social media according to the DMA. Additionally, direct mail household return on investment is 29% and 73% of consumers prefer mail over other advertising channels.
How To Save Money On Direct Mail
Control Design Expenses
Direct mail design costs can play a huge role in your overall cost for direct mail. The most cost-effective method is to design and copywrite in house. If that is not an option, be sure to get quotes from design firms of varying sizes, and if possible, bundled several campaigns into one project.
Manage Your List
The rule of thumb for marketing dictates that 40 percent of the success of your direct mail campaign depends on the quality of your list. Mailing list quality and pricing can vary dramatically and with the introduction of triggered direct mail and smart send lists that are pulled directly from your CRM and or automation tools, not all direct mail campaign cost breakdowns involve mailing list pricing. If needed, however, list rental vs. purchase is typically significantly less expensive.
Postage and Mailing Options
Postage is often the largest cost component for any campaign as costs are dramatically different for first class and standard class mailing. First class will be your most expensive option and it’s critical to evaluate the different classes of mail, the timing of delivery and how certain you want to be about delivery when you determine which category of mail to choose.
Printing and Shipping Costs
This is where the direct mail cost really starts to add up. Depending on the type of collateral you are sending, stock and quantity, advertising costs can vary widely.
The average printing costs of a direct mail campaign can range between $0.05-$1 per person. Lighter materials usually cost less, while heavier materials will cost more. Many printers offer bulk discounts when you reach certain thresholds, so keep that in mind when you are building your mailing list.
Printing choices also affect your shipping costs. Shipping prices fluctuate depending on a number of factors including postage rate, the amount you’ll be sending, and the weight of each piece that you send. Heavier, more expensive stock results in a higher shipping cost.
Direct mail is a cheaper and more effective alternative than many forms of digital advertising, especially when compared to the direct mail cost per 1000 vs other channels. Many companies have an interest in getting started with direct mail, and if the proper considerations are taken, it does not have to be cost prohibitive or difficult to manage.