#4 - A Mailing's True Cost

You put together a mailing. You get bids. You went with the least expensive option (or so you thought).

Your mailing produced poor results.

Why?

Is estimated cost the correct metric to use when comparing prices from different mailers?

When looking at the cost of mailing, just adding up the total cost (printing, mail processing, postage) isn’t the right metric to use. Using that metric could lead to an expensive mistake.

The right metric is to use the cost per response to the mailing, along with the added volume in business.

To quote Steven Covey from his book, "Seven Habits of Highly Effective People",

"Begin with the end in mind."

So, the actual response to your mailing ("the end") is the best measure of a mailing’s success and true cost.

Let me show you why, with the tale of two mailings.

Scenario #1:

A 3% response is considered an average response to a typical purchased mailing list.

Let’s say you spend $1,000 to mail 2,000 pieces. You buy a mailing list covering a specific geographic area around your store.

You get 60 responses to your mailing (3% - statistical average to a non-selective list), with them spending on average $100 each at your store.

You gross $6,000 in sales.

Your cost of mailing is $16.67/response ($1,000 total cost ÷ 60 responses).

Scenario #2:

Now let’s say you spend $1,500 to mail the same 2,000 pieces. That’s a 50% increase over the other example, just to be a bit extreme!

We improve the design and print on a better selection of paper.

Most important, we add targeted and selective demographics to the mailing list selection.

This time, instead of just a geographic area, you include selections that correspond to your typical customer to better target the 2,000 people in your selected area.

The response should increase if the correct demographics are used to select a mailing list crafted to the audience you are seeking. It does cost more, both in time and expense, to craft together a much more precise mailing list.

Your response doubles to 120 (6% - statistical average to a well targeted list), with them spending the same $100 average.

You gross $12,000 in sales.

Your cost of mailing is $12.50/response ($1,500 ÷ 120 responses).

With the total processing costs of $1,500, you doubled your sales to $12,000 for the same mailing.

The extra $500 in cost was multiplied by 12 times in increased sales ($500 x 12 = $6,000 in additional sales).

You also more than doubled your net after costs:

$6,000 sales - $1,000 cost = $5,000 net VS $12,000 - $1,500 = $10,500 net.

So which mailing was the least expensive?

There’s an old saying posted in the lobby of our office: “The bitterness of poor quality lingers long after the sweetness of cheap price is forgotten.” I have found it is true almost 100% of the time.

Sometimes the cheapest price isn’t the “least” expensive option.

Make sure you’re using the right “ruler” to measure what a mailing is really costing you.

No one in the Wilmington area has more experience doing mailings than us.

It has been our specialty since 1953. Using Commercial Printing & Mailing with proven experience is your best guarantee of having a successful mailing.

We can help you best use your Direct Mail dollars to your best advantage, focusing on helping you get the most return for the dollars you spend.