How to Save Money in Direct Mail Marketing

by | Feb 16, 2017

Direct mail marketing can be a very effective way for small businesses to get in front of their ideal customer. It has been tested that the physical nature of mail improves retention and brand recognition and of course offers some very effective targeting choices.
However, with the increasing costs of postage plus the costs involved in graphic design and printing the costs can quickly rise if you don’t plan it correctly. Because I have been able to design direct mail campaigns that fit a variety of business budgets here are some of the tools that I use to do that.

Do it Yourself Direct Mail

Yes, although it’s not good for my business when someone decides to do it theirselves I am not afraid of suggesting this to a business owner so that they are aware of their options.
I have written a more detailed article about this option that you can read here but basically DIY direct mail marketing involves the following:
  • Choose your format (postcards, brochures, letters, etc.)
  • Find a graphic designer to design it for you
  • Get it printed
  • Take it to the post office
As you can probably imagine, what you save in money you spend in time. So you need to decide if this is the best use of your time. Plus you have to make all the decisions yourself instead of being able to put together a plan with someone like me who has done this hundreds of time, but it will save you money.

Saturation Mailing

This is a postal term that means that your mail will be delivered to all the mailboxes in a zip code or a portion of a zip code. Because the postman will basically just drop one of your pieces in every mailbox in his route without sorting and looking for specific addresses this saves the post office labor and time therefore they charge you less in postage.
This option might be great for example for a painting company who wants to target all the houses in a whole zip code. It might not be a good option for a financial planner that is looking for men, ages 45-65 that make $200k or more a year.
Saturation mailing doesn’t give you a lot of targeting options but if you are ok with covering entire neighborhoods or parts of a zip code, even if there is a bit of waste (by delivering your piece to a home that doesn’t meet your criteria but is part of the zip code you want), then this option can save you anywhere from 20 cents or more per address. 

Minimum Effective Dose

Should you send out 2,500, 5,000, 10,000, 20,000 mail pieces or more?
Although the rates go down as the amounts go up, you might be able to make a good ROI on your direct mail campaign by just sending out 5,000 postcards.
On the other hand if your business serves a large geographic area and your service is a large dollar amount and there is a lot of competition then 10,000 might just be a starting point for you.
The mistake I see business owners make here is not sending enough because they don’t want to spend the money. So for example that could mean you send out 5,000 pieces and generate 5 sales but if you had spent a little less than twice the amount to send 10,000 pieces you could have generated 15 sales. So 3x the sales for less than 2x the increase in cost. Therefore you would have actually saved money not becasue you paid less in costs but because you generated more in sales.

Shared Mail

This is by far the most cost effective option for many businesses to employ direct mail marketing. All it consists of is using a direct mail publication where you share advertsing space with other businesses but since the postage is shared by all the businesses participating this significantly lowers the overall cost.
Shared mail rates range between 1 to 4 cents per home. That is the cheapest direct mail you will find.
I have a lot of experience providing shared direct mail and I have seen it produce really good results for some of my clients. Of course the main thing to consider is that you will be sharing advertising space with other businesses and maybe even your competitors. But on the other hand you can reach 10,000 all the way to 600,000 homes (or more) at a fraction of what it would cost you to do it solo.

Volume Discounts

Similar to the minimum effective dose above, both postage and print rates go down with larger quantities.
So one way you can use this for example is by printing 20,000 postcards and then doing 4 mailings of 5,000 each. The rate for printing 20,000 postcards is going to be almost half of the rate of printing 5,000 and then you get to spread out the cost of the mailing over a periof of time.
By the same token the postage for mailing 10,000 is lower than the postage for mailing 2,500. So if you play with these two combinations you can find an option that can fit your budget and save you money.

A Great Offer

I mean putting a great offer or incentive in your mail piece that a potential customer can’t refuse. You might think this is not related to cost but the way it will save you money is because it will make your direct mail piece more effective, it will generate more customers therefore making it more profitable for you and maybe decreasing the amount of direct mail you need to send. It all adds up to more money in your pocket!
So as you can see there are numerous options you can employ to save money while still taking advantage of the awesome power of direct mail marketing. If anything here doesn’t make sense or you got more questions feel free to email me or give me a call and I would be more than happy to go over some options with you, no obligation whatsoever.
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