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

direct mail cost - how to calculate it

Often the first question we are asked by marketers that are considering direct mail is: How much does direct mail cost?

Direct mail campaign cost estimates tend to vary tremendously, and there’s often a bit of mystery involved in the calculation of direct mail prices.

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

Some quotes will include direct mail cost per 1000 (how does that work with triggered mail?), while others will itemize charges down to the smallest detail. What’s often left out from 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 customers build and launch campaigns in our software, and we’ve mailed millions of postcards and letters. Below are the things that we’ve learned along the way that can be helpful for you as you’re figuring out what the true costs of your direct mailing efforts are.

Hidden Direct Mail Costs Can Be Lurking Behind The Scenes

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

Our customers tell us that there are 3 “hidden cost” areas that direct mailers often fail to account for:

  • Direct Mail Campaign production time can be a huge hidden cost. Dozens of hours spread out over 4-6 weeks are typically devoted to pulling together creative, coordinating data, “proofing” your creative and data with your print partner and more.
  • Direct Mail Integration costs can be massive if you’re trying to use the multi-channel marketing approach that marketers agree is most effective. If you’re using a CRM, Marketing Automation or Ecommerce platform, your direct mail service should integrate seamlessly into them for each multi-channel campaigns.
  • 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 $.50 and $3.00 per piece on a direct mail campaign.

That’s before they factor in “soft costs” such as their time. Why time is considered soft, we have no idea.

How do you estimate direct mail cost? Traditional direct mail advertising costs involve many vendors, each with several components that they deliver in a pretty complex project. Some of the factors that impact the cost of direct mail include:

  • Volume
  • Direct Mail Design Costs
  • Copywriting Costs
  • Quantity or Mailing List Size
  • Postage Rates & Choices
  • Format Selection (Cost of paper, ink, printing & handling)
  • Personalization

New software tools (like Postalytics) simplify this significantly. Since software handles much of the work, there are fewer things that can impact the cost of a direct mail campaign.

Check Out Postalytics Pricing

How Much Does Direct Mail Cost Per 1000?

Cost per thousand, or CPM is a common way that advertising is measured. It essentially boils down a price of an advertisement to a per unit cost for 1,000 “impressions”.

Little know fact – the “M” in CPM stands for “mille”. Mille is Latin for thousands.

To calculate direct mail cost per 1000, take the total cost of the campaign & divide it by 1,000.

Let’s take a sample 10,000 piece Postalytics 4 x 6 postcard campaign, using the Pro Plan:

Costs: Printing, Paper, Postage, Tracking = $.53 per piece or $5,300 total. Pro Plan Subscription = $399. (See Postalytics Pricing Plans for more info). Mailing List (we can help you acquire one) = $300.

Total cost = $5,999.00. Cost per 1000 of a direct mail campaign (Postalytics) = $5,999.00/1,000 or $5.99

Direct mail cost per 1000 is used to compare direct mail costs to costs of other media. For example:

  • Cable TV Cost Per 1000 – $23.00
  • LinkedIn Ad Cost Per 1000 – $8.39
  • Postalytics Direct Mail Cost Per 1000 – $5.99

The Cost Of Direct Mail Advertising Is Offset By High ROI

direct mail costs - high ROI

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

While mail volumes peaked in 2008 in the U.S., direct mail is making a comeback in the marketing world, because it works.

Take a look at some of these stats that demonstrate just how valuable a contribution direct mail could make to your advertising efforts:

  • Direct mail has a house list response rate of 5.1%. Compared to 0.6% from email, 0.6% from paid search, 0.2% from online display advertising, and 0.4% from social media. This is the highest response rate that the DMA has found in any channel since they started publishing their “Response Rate Report” in 2003.
  • Direct mail household return on investment is 29%. This outpaces both paid search (28%) and online display advertising (16%).
  • 73% of consumers prefer snail mail over other advertising channels. Additionally, 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 the 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

direct mail cost - campaign volume

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

Those printers, people and hours spent on the campaign look better when spread out over large numbers of targets.

Let’s say that it costs a printer $1,000 for the equipment and their team to spend 4 hours on a campaign, at a minimum:

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

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

New Approaches To The Fixed Costs Associated With Campaigns

direct mail costs - new ideas

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

This volume enables a printer who is part of the network to do a run of, say, 6×9 postcards that might include a single triggered postcard from one client, a small batch of 50 from another, and so on and so on.

They can get to their 10,000 piece goal per run, by aggregating lots of small campaigns through software.

3 No Brainer Tips: How To Save Money On Direct Mail

It’s a win/win.

Direct Mail Design Charges

direct mail design costs

Direct mail design costs play a big factor in your overall direct mail cost. We see organizations take different approaches, all of which can work.

Design It In-house

Many companies opt for a do-it-yourself design, sometimes enlisting someone with digital or print design skills within their company to build their postcard or letter creative. This is the least expensive strategy, at least in terms of up front cost. If your internal resource isn’t familiar with print or direct mail design, it is important that they follow direct mail design best practices.

Use A Professionally Built Template

Professionally designed direct mail templates can be accessed in newer direct mail automation tools. These enable marketers without a ton of 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 mailers, free of cost. Want to give it a shot? Check out our drag-and-drop postcard editor (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 pricing. On average, you can probably expect to spend between $150-$250 for a standard postcard or letter from a mid-range designer. More experienced designers may charge as much as $1,000, and less experienced designers may charge less.

Learn More About Direct Mail Design – Watch A DM Creative Expert Break Down 3 Pieces, Before & After Video

Watch DM Design Before & After

Copywriting Outlay

direct mail cost - copywriting

The cost of direct mail is also impacted by copywriting charges.

So is the ROI.

Don’t send out bad copy. You’ll get bad results.

Experienced copywriters know how to deliver messages that convince customers to take action — whether that action is calling your company to set up an appointment, buying a product, or visiting a website to fill out a contact form.

Charges are similar to graphic design freelancers & agencies. Plan to spend between $200 and $2,000 depending upon the complexity of the piece and the experience of the copywriter.

If you have a small budget, you’ll probably have to handle the copywriting yourself.

Read up on direct mail copywriting best practices and handle the messaging on your own. Using Postalytics, you can easily add copy to your postcards and other collateral that you send through our system and monitor the results. Postalytics makes it easy to re-use or copy templates that perform well.

Learn Direct Mail Copywriting Fundamentals From A Chief Creative Officer

Watch DM Copywriting Fundamentals Video

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. Mailing list quality and pricing can vary dramatically.

Interested in learning more about the types of direct mail lists, how they’re built and priced? Check out the Postalytics Ultimate Guide To Mailing List Selection And Testing.

direct mail cost - the golden rule

With the introduction of triggered direct mail and smart send lists that are pulled directly from CRM and Marketing Automation tools, not all direct mail campaign cost breakdowns involve mailing list pricing.

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

Most direct mailers will rent mailing lists, rather than purchasing them. The costs are considerably lower, and as they get responses, they can build up their own in-house list.

Mailing list rental can cost between $0.03-$0.30 per record, depending on a number of factors, with the quality of the data itself will be the primary factor. Often mailing list costs are listed on a per 1000 basis, so marketers will use the direct mail cost per 1000 method as their means of expressing the cost of a direct mail campaign.

The primary types of lists are residential, occupant and business lists. You can also rent specialty lists that are built from behavioral data (both offline and online). These lists are more expensive, but can deliver better response.

Postalytics has integrated a wholesale provider of mailing lists right into our software. The wholesaler only sources from premium compiled sources and we pass along transparent, clear pricing. Here’s a breakdown of the costs and cost per 1000 of a Postalytics mailing list:

  • Consumer List – $0.03 per record or $30 per 1000 (single use, premium selects additional)
  • Occupant List – $0.008 per record or $8 per 1000 (single use, available names additional)
  • Business List – $0.046 per record or $46 per 1000 (1 year multiple use, premium outputs additional)

Watch A Mailing List Video

Direct Mail Postage Costs

direct mail cost - postage

Direct Mail postage is often the largest cost component for any campaign. Postage costs are drastically different for first class and standard class mailing. It is important to think through the different classes of mail, the timing of delivery and how certain you want to be about delivery when you determine which category of mail to choose.

When To Use First Class vs Standard Mail – Learn More

First Class Postage Cost

First class mail is the most expensive option offered by the USPS, and with the price comes their highest level of service. A first class letter costs $.50 retail, and a small postcard costs .$35 to send first class. Direct mail service providers can often reduce postage costs through volume discounts. The first class level of service provides:

Standard Mail Postage Cost

Standard class mail (or Marketing Mail) is used by many direct mailers to lower direct mail advertising costs. This is a class of mail open only to direct mail service providers like commercial printers. The pricing varies based on the format, starting at about $.19 per piece. The standard class direct mail level of service provides:

  • Slower delivery – between 10-15 business days
  • Lower priority processing – during peak seasons or regional slowdowns due to equipment issues, etc, standard class mail is processed after other types of mail
  • Limited Intelligent Mail Barcode 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’re able to do this by taking advantage of presorting, NCOA and CASS by funneling mail from many customers through high volume, sophisticated printers and mailers. Presorted first class mail costs the USPS less money to process and deliver, resulting in a steep discount of about 20% on postage. We pass these benefits on to all of our customers through our fixed-rate pricing.

Format, Printing & Shipping Costs

Here is where the direct mail cost really starts to add up. Depending on the type of collateral you are sending, 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 far less in paper, ink, production and shipping than a multiple page letter. Many marketers try to keep costs low by choosing smaller formats. However, response rates show that often larger formats deliver higher ROI. Choose your format based on the message you’re trying to communicate, rather than the format cost. If your message is super simple, a small format might work great. More complex ideas require more real estate.

The typical printing costs of a direct mail campaign can range between $0.05-$1.00 per person. Lighter materials will typically cost less, while heavier materials will cost more. Many printers will offer bulk discounts when you reach certain thresholds, so that is also something that needs to be taken into consideration.

Your printing choices also affect your shipping costs. Shipping prices fluctuate depending on a number of factors including postage rate, the amount you’ll be sending, and the weight of each piece that you send. Heavier, more expensive stock results in a higher shipping cost.

Here at Postalytics, we aim to simplify printing and shipping prices into a simple easy-to-use pricing structure. These prices are all-inclusive and include the usage of our templates, editor, printing, and shipping services. These are your out-the-door prices per person for our “Pro” plan, giving you a simple way to estimate costs and set effective budgets when using Postalytics:

Keep in mind that further discounts are offered with our larger plans and larger orders. By combining all standard costs into one simple to understand direct mail cost-per-piece, this makes it easy for our customers to budget for their campaigns and choose the best option that falls within their budget.

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

direct mail cost

Personalized Direct Mail Rates

Personalization works. In study after study, the use of data to speak to the audience on a one to one basis elevates response rates. Common direct mail personalization techniques include:

  • Variable Data Printing – (VDP) using a commercial, digital printer, each mailpiece can be customized using data, similar to how email personalization works
  • Personalized Landing Pages – pURLs (personalized URLs) are tools that can use the same data used in VDP to personalize the landing page for each recipient

Traditional Direct Mail Personalization

Traditional direct mailers can include personalization in your campaign with Variable Data Printing and pURLs. The process involves a significant amount of back and forth, often with highly skilled technicians called pre-press operators to set up the VDP run, and 3rd party landing page software to setup the pURLs. The time involved in setting up personalization can drive the overall cost of direct mail very high when working with traditional printer/mailers.

Direct Mail Automation Personalization

Newer direct mail automation tools like Postalytics enable personalization at no extra cost. Why? Because the production methods associated with automated direct mail are software based, rather than services based.

Variable Data Printing

VDP is often a standard feature of automated direct mail tools. Because the production software is building postcards and letters electronically, there’s no difference in producing a highly personalized mailpiece than a batch & blast mailpiece. There’s no meetings, calls, and people needed to coordinate the hand-offs associated with traditional direct mail VDP.

Personalized URLs

pURLs are often included in the cost of direct mail automation. Rather than requiring 3rd party software to generate data driven personalized landing pages, direct mail automation vendors like Postalytics include pURLs that work with existing landing page systems at no extra cost.

Remove Direct Mail Cost Variables from the Equation

Direct mail is a cheaper and more effective alternative than many forms of digital advertising, particularly when you analyze direct mail cost per 1000 vs other channels. Many companies have an interest in getting started with direct mail, but wrongly assume that it will be cost prohibitive or difficult to manage. Postalytics solves both of these issues by giving you an all-inclusive system that allows you to design, print, send, and track direct mail campaigns through your CRM with a per-piece pricing that makes estimating costs simple.

Learn More About Automated Direct Mail Prices

Here at Postalytics, we help organizations automate, track, and integrate direct mail with digital marketing channels. Our system makes it simple for companies to reap the benefits of direct mail, whether they’re seasoned veterans in direct mail advertising or this is the first time they’ve delivered advertisements through the channel

Postalytics has simple plans that make the pricing of automated direct mail much simpler than the old traditional direct mail methods. To learn more:

Check Out Postalytics Pricing