Direct Mail Costs Made Easy - How To Understand Direct Mail Pricing

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Often the first question we get from marketers considering direct mail is: how much does direct mail cost?

Cost estimates for direct mail campaigns tend to vary wildly, and there is often a bit of mystery involved in calculating direct mail prices.

Even the way direct mail advertising costs are presented can be highly variable.

Some quotes will include the cost of direct mail per 1,000 (how does that work with mail enabled?), while others will itemize charges down to the finest detail. What is often left out of the proposals you receive are the true “hidden costs” associated with the mechanics of creating and managing modern direct mail campaigns.

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We’ve seen thousands of clients create and launch campaigns in our software, and we’ve sent millions of postcards and letters. Below are things we’ve learned along the way that may be helpful to you as you discover what the true costs of your direct mail efforts are.

The hidden costs of direct mail may be lurking behind the scenes

At the end of the day, the biggest costs may be items that are left out of the proposals you receive from direct mail providers. If you’re not careful, the things you didn’t even consider can be the most expensive part of putting together a direct mail campaign.

Our customers tell us there are 3 areas of “hidden cost” that direct mailers often don’t consider:

direct mail campaign production time can be a huge hidden cost. Dozens of hours spread over 4-6 weeks are typically spent gathering creative, coordinating data, “verifying” your creative and data with your print partner, and more.
Direct mail integration costs can be huge if you’re trying to use the multi-channel marketing approach that marketers find most effective. Whether you’re using a CRM, marketing automation, or eCommerce platform, your direct mail service needs to seamlessly integrate with them for every multi-channel campaign.
direct mail tracking & analytics costs are often not considered when planning a direct mail campaign. the time and effort required to answer the question “what happened after I sent the mail?” can be a huge time sink. Your direct mail service provider should provide easy-to-read campaign dashboards that tell you exactly where your mail is and exactly who has responded.

How much does direct mail advertising cost per piece?

At the end of the day, most marketers will end up spending between $0.65 and $3.00 a piece on a direct mail campaign.

That’s before you take into account “indirect costs” like your time. why the weather is considered smooth, we have no idea.

How do you estimate the cost of direct mail? Traditional direct mail advertising costs involve many vendors, each with multiple components that they deliver on a fairly complex project. Some of the factors that affect the cost of direct mail include:

volume
direct mail design costs
writing costs
number or size of mailing list
postal rates & options
format selection (cost of paper, ink, printing and handling)
customization

new software tools (such as postalytics) simplify this significantly. Since the software handles much of the work, there are fewer things that can affect the cost of a direct mail campaign.

see postalotics pricing

how much does direct mail cost per 1000?

Cost per thousand, or cpm, is a common way to measure advertising. it essentially reduces the price of an ad to a cost per unit for 1000 “impressions”.

little known fact: the “m” in cpm stands for “mille”. mille means thousands in Latin.

To calculate the cost of direct mail per 1,000, take the total cost of the campaign & divide it by 10.

Let’s take a sample of 10,000 pieces of postalotics from a 4 x 6 postcard campaign, using the professional plan:

costs: printing, paper, postage, tracking = $0.57 per piece or $5,700 total. professional plan subscription = $399. (see postalotics pricing plans for more information). mailing list (we can help you get one) = $300.

total cost = $6,399.00. cost per 1000 of a direct mail campaign (postalytics) = $6,399.00/10 or $639.00.

While cpm is not commonly used by professionals in the direct marketing industry, it is a very common way of measuring the cost of other mass media such as television, radio, billboards, etc.

direct mail cost per 1,000 is sometimes used to compare direct mail costs to the costs of other media that are highly scalable and reach large audiences. You’ll find direct mail to be a very expensive channel when measured by cpm relative to other channels.

for example:

Cable cost per 1,000 – $23.00
Radio cost per 1,000 – $5.22
Static billboard cost per 1,000 – $3.47

so if it’s 10-20 times more expensive per cpm, why do it? because channels that are “cheap” by cpm standards are not:

targeted: you can’t get that sign on some houses and not on others
custom: you can’t change the offer or call to action on your radio ad per person who sees it
on: You cannot trigger a cable TV ad to target a specific target when something happens

In a nutshell: Direct mail is not similar to “mass media” channels. it’s much more like email or digital marketing.

direct mail advertising costs are offset by a high return on investment

Direct mail is one of the most reliable forms of advertising in the world. the cost of a direct mail campaign is usually a fraction of the return it generates.

while mail volumes peaked in 2008 in the us. In the US, direct mail is making a comeback in the marketing world, because it works.

Take a look at some of these statistics that demonstrate just how valuable direct mail’s contribution could be to your advertising efforts:

direct mail has a 5.1% internal list response rate. compared to 0.6% for email, 0.6% for paid search, 0.2% for online display advertising, and 0.4% for social media. this is the highest response rate the dma has found on any channel since they began publishing their “response rate report” in 2003.
the return on investment of households direct mail is 29%. This exceeds both paid search (28%) and online display advertising (16%).
73% of Consumers prefer postal mail to other advertising channels. In addition, 40% of customers will try new businesses after receiving direct mail from them.

learn more about how direct mail response rates are calculated

Let’s dive into typical direct mail cost categories and break down how much you can expect to spend on a single direct mail campaign:

fixed costs make campaign volume matter

There are some fixed costs involved in putting together a direct mail campaign.

Printers, people, and hours spent on the campaign look best when spread across a large number of targets.

Let’s say it costs a printer $1000 for equipment and his team to spend 4 hours on a campaign, at least:

$1,000 divided by 10,000 pieces puts fixed costs at $0.10 per piece.
$1,000 divided by 500 pieces puts fixed costs at $2.00 per piece .

That’s why you don’t see many “small batches” or “triggered direct mail” produced by traditional printers/mailers and agencies.

new approaches to fixed costs associated with campaigns

Newer direct mail automation tools solve this problem by bundling the volume of multiple clients using the same creative formats together.

This volume allows a network printer to run a run of, say, 6×9 postcards which may include a single activated postcard from one customer, a small batch of 50 from another, and so on. activated.

They can reach their goal of 10,000 pieces per run by adding many small campaigns through the software.

3 Tips: How to Save Money on Direct Mail

It’s a win/win.

direct mail layout charges

Direct mail design costs are a major factor in the total cost of direct mail. we see organizations take different approaches, all of which can work.

design it internally

Many businesses opt for a DIY design, sometimes recruiting someone with print or digital design skills within their company to create their creative postcard or letter. this is the least expensive strategy, at least in terms of initial cost. If your internal resource isn’t familiar with print or direct mail design, it’s important that they follow direct mail design best practices.

use a professionally created template

Professionally designed direct mail templates can be accessed in the newest direct mail automation tools. these allow marketers without much design experience to work within proven frameworks that will represent their brands well and produce results.

postalytics makes creating and designing your postcard or letter simple and free. we offer high-quality templates that you can use when designing your banner ads, free of charge. do you want to give it a try? check out our drag and drop postcard builder (no login required) to see how it works.

hire a designer or agency

Hiring a professional designer or an agency with designers can also vary quite a bit in price. On average, you can probably expect to spend between $150 and $250 for a standard postcard or letter from a mid-range designer. more experienced designers can charge up to $1,000, and less experienced designers can charge less.

learn more about direct mail design: watch a dm creative expert break down 3 pieces, before & after the video

writing cost

the cost of direct mail is also affected by copywriting charges.

so is the return on investment.

don’t send bad copy. you will get bad results.

Experienced copywriters know how to send messages that convince customers to take action, whether it’s calling your business to make an appointment, buying a product, or visiting a website to fill out a contact form.

fees are similar to freelance graphic design & Agencies plan to spend between $200 and $2,000 depending on the complexity of the piece and the experience of the writer.

direct mail list costs and list size

The golden rule of direct marketing dictates that 40% of the success of your direct mail campaign will depend on the quality of your list. the quality and price of the mailing list can vary drastically.

Interested in learning more about the types of direct mailing lists and how they are built and priced? Check out postalotics’ definitive guide to mailing list selection and testing.

With the introduction of triggered direct mail and smart mailing lists that are pulled directly from crm and marketing automation tools, not all direct mail campaign cost breakdowns involve the price of the mailing list .

However, if you’re using direct mail for acquisition or lead generation, as many marketers do, you’ll need to factor the cost of the mailing list into your total cost of direct mail marketing.

Most direct mailers will rent mailing lists, rather than buy them outright. the costs are considerably lower, and as they get responses, they can build their own internal list.

mailing list rental can cost between $0.03 and $0.30 per record, depending on a number of factors, with the quality of the data itself being the main factor. Mailing list costs are often listed per 1,000, so marketers will use the direct mail cost per 1,000 method as a means of expressing the cost of a direct mail campaign.

The main types of listings are residential, occupant, and commercial listings. You can also rent specialized lists that are created from behavioral data (both offline and online). these lists are more expensive but may offer better answers.

postalytics has integrated a wholesale mailing list provider directly into our software. The wholesaler only sources premium compiled fonts and we pass on clear and transparent pricing to you. Here is a breakdown of the costs and the cost per 1000 of a postalytics mailing list:

consumer list – $0.03 per registration or $30 per 1,000 (one time use, additional premium selections)
occupant list – $0.008 per registration or $8 per 1,000 (one time use, additional premium selections) additional available) )
business list – $0.046 per registration or $46 per 1000 (1 year multi-use, additional premium outlets)

direct mail postage costs

direct mail postage is often the highest cost component to any campaign. shipping costs are drastically different for first class and standard class mail. It’s important to think about the different classes of mail, the timing of delivery, and how certain you want to be about delivery when determining which category of mail to choose.

Find out when to use first class vs. standard mail

first class shipping cost

First Class Mail is the most expensive option the USPS offers, and with the price comes their highest level of service. first class postage is $0.58 retail, and a small postcard costs $0.40 to send first class. direct mail service providers can often reduce shipping costs through volume discounts. first-class level of service provides:

Expedited Delivery: Usually 3-5 business days after envelopes are received from the printer
Priority Processing: During peak shipping periods, First Class Mail is processed first
detailed smart mail barcode data: marketers can trace mail processing back to the local post office, just before delivery

Standard cost of postage

many direct mail companies use standard class mail (or marketing mail) to reduce direct mail advertising costs. this is a mailing class open only to direct mail service providers such as commercial printers. the price varies depending on the format, starting at around $0.31 per piece. standard class direct mail service level provides:

Slower delivery: 10-15 business days
Lower priority processing: During peak seasons or regional delays due to equipment issues, etc., Standard Class Mail processed after other types of mail
smart mail barcode limited data

Here at postalytics, we offer a simple, flat rate pricing system for both first class and standard class postage, even at low volumes. We can do this by taking advantage of pre-sorting, ncoa, and cass by funneling mail from many clients through sophisticated, high-volume printers and mailers. Presorted First Class Mail costs the USPS less money to process and deliver, resulting in a huge discount of about 20% on postage. We pass these benefits on to all of our customers through our flat-rate pricing.

format, print & shipping costs

This is where the cost of direct mail really starts to add up. Depending on the type of collateral you send, the quality of the stock, and the number of prospects included in your campaign, direct mail advertising costs can vary widely.

The format chosen has a huge impact on the total cost of direct mail. a small postcard costs much less in paper, ink, production, and postage than a multi-page letter. many marketers try to keep costs down by choosing smaller formats. however, response rates show that larger formats often deliver a higher return on investment. choose your format based on the message you are trying to communicate, rather than the cost of the format. if your message is super simple, a small format could work very well. more complex ideas require more real estate.

Typical printing costs for a direct mail campaign can range from $0.05 to $1.00 per person. lighter materials will typically cost less, while heavier materials will cost more. many printers will offer volume discounts when you hit certain thresholds, so that’s something to keep in mind as well.

Your printing options also affect your shipping costs. Shipping prices fluctuate based on a number of factors, including the postage rate, the quantity you’re shipping, and the weight of each piece you’re shipping. Heavier, more expensive stock results in higher shipping cost.

Here at postalytics, our goal is to simplify printing and shipping pricing into a simple, easy-to-use pricing structure. These prices are all inclusive and include the use of our templates, editor, printing and shipping services.

These are your retail prices per person for our “pro” plan, which gives you an easy way to estimate costs and set effective budgets when using postalytics:

Please note that further discounts are offered with our larger plans and larger orders.

By combining all the standard costs into one easy-to-understand cost per direct mail piece, our clients can easily budget their campaigns and choose the best option that fits their budget.

If you’re interested in seeing what the final product will look like, you can request samples directly through their dashboard:

direct mail custom rates

customization works. In study after study, using data to speak to audiences individually raises response rates. Common direct mail personalization techniques include:

variable data printing (vdp) using a commercial digital printer, each postcard piece can be personalized using data, similar to how email personalization works
landing pages custom: purls (custom urls) are tools that can use the same data used in vdp to customize the landing page for each recipient

traditional direct mail personalization

Traditional direct mailers can include personalization in their campaign with variable data printing and flyers. The process involves a significant amount of back and forth, often with highly skilled technicians called prepress operators to set up the VDP run and third-party landing page software to set up the straps. the time required to set up customization can make the total cost of direct mail too high when working with traditional mailers/printers.

direct mail automation customization

new direct mail automation tools like postallytics allow for customization at no additional cost. why? because the production methods associated with automated direct mail are software-based and not service-based.

variable data printing

vdp is often a standard feature of automated direct mail tools. Because the production software creates postcards and letters electronically, there’s no difference in producing a highly personalized mailing than batch-and-ship. explosive mail. there are no meetings, calls, or people needed to coordinate transfers associated with traditional direct mail vdp.

custom urls

purls are often included in the cost of direct mail automation. Instead of requiring third-party software to generate data-driven custom landing pages, direct mail automation providers like postalytics include purls that work with existing landing page systems at no additional cost.

remove direct mail cost variables from the equation

Direct mail is a cheaper and more effective alternative to many forms of digital advertising, especially when you look at direct mail’s cost per 1,000 versus other channels. Many companies are interested in getting started with direct mail, but mistakenly assume it will be prohibitively expensive or difficult to manage. postalotics solves both problems by giving you a comprehensive system that allows you to design, print, send and track direct mail campaigns through your crm with piece-rate pricing that makes cost estimating simple.

learn more about automated direct mail pricing

Here at postalytics, we help organizations automate, track, and integrate direct mail with digital marketing channels. our system makes it easy for businesses to reap the benefits of direct mail, whether they’re a seasoned veteran of direct mail advertising or their first time sending ads through the channel

postalytics has simple plans that make automated direct mail pricing much simpler than the old traditional direct mail methods. to know more: