Marketers want to know how to get the best return for their advertising dollars. So we assembled the typical direct mail costs to show you what’s involved and what options you’ll have when it’s time to plan your next direct mail campaign.
Direct Mail Advertising Costs: What’s Involved?
There are a lot of ways to improve your direct mail marketing efforts and we’ve covered many of them in our posts. For example, we’ve talked about how to optimize your campaigns and improve your open and response rates. We’ve discussed direct mail best practices, industry statistics, secrets to success, data analysis, and so much more. Nevertheless, even though you’re armed with a lot of helpful information, your biggest obstacle to success might be direct mail advertising costs. Can you afford the campaign you’re conceiving?
The USPS offers a Direct Mail Cost Calculator that can help you estimate your total spend based on five factors:
We’ve talked about all these topics at length, too. But what we haven’t done (up until now) is discuss how to figure out the costs. What variables affect your costs? Let’s look more closely at these five categories so you can weigh your options and make the best decision for your brand’s best direct mail campaign.
1. Direct Mail Classification
When we talk about what classification your mail will fall into, there are two choices to pick from—USPS Marketing Mail or First-Class Mail.
USPS Marketing Mail
Remember Standard Mail? Well, that’s what USPS Marketing Mail is now, it just has a more “marketable” name. USPS Marketing Mail is a bulk rate for mail pieces that weigh less than a pound each. But you do have to have at least 200 pieces or 50 pounds of mail. Marketing Mail applies to:
- Printed materials like flyers, letters, or advertising
- Newsletters, bulletins, and catalogs
- Small parcels
If you’re new to direct mail, USPS Marketing Mail is the popular option because the postage prices are quite low. We can provide bulk prices for your letters, flats/large envelopes, and parcels (Marketing and Parcel Select Lightweight). Furthermore, if you’re a nonprofit, you can get an even better rate, but you’ll need specific authorization. Ask us about direct mail nonprofit rates.
Also, you can “add on” to your campaign by including electronic tracking, bulk insurance, and/or a return receipt by request. USPS Marketing Mail doesn’t allow for forwarding or returned mail unless you request it with what’s known as an Ancillary Service Endorsement. This tells the Postal Service what to do in case they can’t deliver your mail. (Hey, it happens, no matter how clean your data is.) So, you can request that the mail is forwarded and/or that you receive the correct address. As you might have guessed, these services may result in additional fees or postage.
Your other option is to send your direct mail campaign via First-Class Mail. This is an affordable way to send mail at single mail prices, and it’s faster than Marketing Mail. The local delivery time is approximately 1-3 days while the national delivery time is between two and five days. First-Class Mail works for the same types of mail as Marketing Mail, but it’s best for each piece to weigh less than 13 ounces. You should try to stay under 500 pieces of mail to realize its full benefit. Additionally, First-Class Mail includes return and forwarding address services for no extra charge.
2. Direct Mail Format
You have a lot of options when it comes to what format you want to use. But typically, you’ll have four types of direct mail to choose from: postcards, folded self-mailers, letters, and flats. Each one affects your direct mail advertising costs differently. So let’s look at each of these to determine what’s the most effective direct mail format for your brand’s next campaign.
Postcards have been a direct mail staple for many successful brands. They’re relatively inexpensive and they have a better “read rate” than other types of direct mail. In fact, postcards have an almost 4% year-over-year increase in getting people to read your message. Plus, people find them useful.
It’s not the most effective direct mail format, but postcards still perform very well with a response rate of 5.7%. Naturally, results will vary from one brand to the next, but postcards are very often a cost-effective way to market your product or service. For example, if you’re making a product announcement, or you’re advertising an event (or retail store opening or website launch), a direct mail postcard makes perfect sense.
Some of the popular postcard sizes to consider are:
- Standard (4¼” x 6″)
- Oversized (9″ x 6″)
- Jumbo (11″ x 6″)
One thing to keep in mind with postcards: any “value” pricing you may receive applies to First-Class Mail only. If you use USPS Marketing Mail, you’ll pay the same price as if you were sending a standard letter.
The standard direct mail letter offers a very personal feel to your direct mail campaigns, as it emulates the common letter/envelope correspondence you’ve likely received many times. This popular format has proven itself as a cost-effective way to introduce your brand’s products or services, plus it’s a great way for a nonprofit to kick off a fundraising campaign. A well-written direct mail letter creates a valuable one-on-one connection with your customers.
Some of the typical sizes for “standard” direct mail letters would be:
- The true standard, #10 business/correspondence envelopes (4-⅛’ x 9-½’)
- Monarch envelopes (3-⅞’ x 7-½’)
- A-style, or announcement envelopes—these range from A-2 (4.375” x 5.75”) to A-10 (6” x 9.5”).
- 6” x 9” envelopes
Direct mail letters produce a response rate of around 4.3%, so it’s no wonder they continue to be a direct mail favorite among marketers in every industry.
When you want to avoid the cost of an envelope, try a Folded Self-Mailer that’s sealed with glue or stickers to form a letter-size mail piece. Optionally, you could add a reply card or coupon as part of your design. There are a number of ways to fold it (bi, tri, quarter, and oblong), plus you can get creative with how you display your information. The USPS offers FSM resources to help you comply.
Last but certainly not least, let’s talk about the most effective direct mail sales format: the oversized envelope, or flat. Technically, we’re talking about anything that’s larger than the aforementioned standard letter but smaller than four ounces. According to the USPS, these “big” mailers are large envelopes but it could also mean newsletters, magazines, and/or catalogs, depending on their size. To qualify as a true “flat,” the piece of mail must have at least one dimension that’s equal to or larger than these specs:
- Width (6-⅛”)
- Height (11-½”)
- Depth (¼”)
For example, a standard 9″x12″ envelope is a popular size for a direct mail flat. Essentially, you’re probably sending your campaign this way because you don’t want to fold its contents. Your direct mail advertising costs will be higher, but you’ll also get the best response rates at roughly 6.6%.
3. Direct Mail Design
When it comes to the design of your mail piece, your options are simple. Either you’re:
- Creating it in-house (aka DIY) or,
- You’re outsourcing it to a graphic designer of your choice.
Typically, you’ll pay less if you employ someone on your staff who excels in the field of graphic design. But if you have to hire a freelance designer, your costs will vary greatly depending upon that individual’s pricing structure. It could be based on their experience level, where they live, etc. The median rate is a little over $24 per hour. Plus, you’ll need to determine what type of paper you want to use, if you’ll apply color ink or go with black and white, etc. Whatever direction you take, remember that the better your direct mail piece looks, the better response you’ll get.
We can’t offer much advice on who you choose to design your campaign, but we can provide plenty of feedback when it comes to paper, color, and envelope options. Having this information up front will help your designer understand your vision and enable them to establish the guidelines for their work. Contact us to discuss your options.
4. Direct Mail List Type
The mailing list you choose for your campaigns will greatly affect your results—and the direct mail marketing metrics tell the story. According to research by the Association of National Advertisers, the average response rate for a “house” list hovers around 9%. These are the names and addresses of your current customers. If you use a rented list, however, you can expect a somewhat lower response rate of around 5%. These are your prospective customers. A rented (or purchased) list can cost anywhere from two cents to 30 cents per household. So if you’re mailing to your house list, you’re eliminating that cost entirely—and depending on what you want to accomplish with your campaign, your costs will vary accordingly.
Make Sure You Have Clean Data
A word of warning. Dirty data has a profound effect on your direct mail advertising costs. That’s why data hygiene and list management become such important factors when you’re trying to get the most from your print marketing campaigns. When you have duplicate contacts (aka dupes), incomplete or old data, or even bad parsing of various fields imported from different systems, you’ve got data issues. And it spells disaster for your response rates and ROI. You’re wasting money. So we recommend a four-part solution to maintain clean data and healthy mailing lists.
- Analyze your data. If you have a problem, check to see how it’s currently entered into your CRM software. Then establish rules and enforce them throughout your organization.
- Clean your data regularly. Don’t make data hygiene an annual thing. Monitor it more often and if you rent a list, be sure to merge, purge, and check for dupes.
- Designate a data ambassador. It will be much easier to have clean data if you only have one person in charge of your database.
- Raise your standards. Develop a written plan and follow it.
At MSP, we use the National Change of Address (NCOA) system and other data list management and hygiene methods to ensure that your information is correct and prepped for your next direct mail marketing campaign. Contact us to get started.
5. Direct Mail Campaign Quantity
With your direct mail campaign ready to roll, you need to determine how many pieces you’ll be mailing to your list(s). Are you trying to reach a smaller, more targeted audience or a larger, wider base of would-be customers?
We specialize in high-volume direct mail campaigns, so there’s really no limit to how many pieces you can print. MSP can handle your direct mail efforts regardless of the size. Whether you have 1,000 pieces or 10-million or more, we can find the best solution for your campaign.
Direct Mail Advertising Costs: Let’s Plan Your Campaign
Naturally, your best bet is to have a basic understanding of what you want to accomplish with your direct mail marketing campaigns. Then you can bring them to us so we can analyze the particulars and provide your best options based on your goals and budget. Contact an MSP representative today and let’s get started.
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