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Direct Mail Costs

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Direct mail is the most expensive form of advertising on a cost per thousand basis. However, in the UK over £2 billion is spent on direct mail campaigns each year, illustrating that whilst it is expensive it can generate excellent results.

The exact cost of a direct mail campaign depends on the quantity being sent, what’s included in the mailing, and whether you require a mailing list.

Sourcing the Mailing List

If you don’t have an existing customer base or are looking to attract new customers you’ll need to purchase a mailing list.

All types of mailing lists are available. For B2C mailing lists you can target consumers within a certain income bracket, homeowners located in a certain geographic area, or even people with specific hobbies and interests. Comprehensive B2B mailing lists also exist, allowing you to target businesses within an industry, or certain types of people through job title.

The cost of mailing lists depend on how targeted they are, the number of contacts ordered, and whether it’s a one-off campaign or you wish to obtain an annual license, allowing you to re-use the mailing list.

Consumer Mailing Lists (Cost per thousand):

  • Low-Level Targeting: £80
  • Highly Targeted:£200

Business Mailing Lists (Cost per thousand):

  • One-Off License: £150
  • Annual License: £500

The cost of the content of direct mail depends on what you decide to include and the quantity that you order. For orders of only 1,000 the approximate costs are:

  • Envelopes: £25
  • Letterheads: £150
  • A5 Leaflets: £80
  • Brochures: £300

If you’re sending out a simple letter it generally works out cheaper to print the letters yourself using a home printing rather than ordering letterheads. However, for mailings to more than 1,000 contacts you’d be better off ordering direct from a printing company.

Remember that the success of your campaign depends on three factors – the quality of the mailing list, timing, and the quality of the content. A successful mailing requires all three aspects to be right. You’re usually best off paying for a high quality brochure rather than a simple black and white letter.

Overall Costs

Through adding up the cost of the mailing list, the printing, and the stamps a direct mail campaign can cost anything from £300 to £700 per thousand mail shots.

These are substantial costs which is why success in direct mail relies on careful testing, removing unresponsive contacts and careful targeting of responsive customers. However, if you can master direct mail the possibilities are endless – simply roll the campaign out to a wider audience and your business could grow rapidly.

Response Rates

There are many marketing experts who claim that the expected response rate from cold prospects is 1-2%, rising to 2-4% for existing customers.

There’s certainly some truth in this but it is a huge generalisation – if you’re selling kitchens you can be sure that you won’t get a response rate of 1%, yet a response rate of 1 in every 1,000 could still be an extremely profitable mailing.

Always calculate your breakeven point before carrying out a direct mail campaign and carefully track the responses, possibly through the use of discount codes. Use discount codes cleverly – if you have a product that targets both men and women why not use different discount codes. Although men may be just as able to purchase your product women may be more likely to respond to a mailing. The same goes for geographical areas, ages, and income groups.

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