Direct mail advertising costs are best calculated based on the lifetime value of your customer and your return on investment.
While many people think of this cost as a combination of USPS rates, cost of postcard printing, and other costs like lists, it’s best to look at the return on investment of a campaign based on your customer lifetime value.
Instead of how much are you spending, back into if the campaign is worth it based on your expected return and the value of a paying customer.
With this in mind, this post will help you:
- Determine which type of campaign to run (area mail or addressed campaign).
- Show you expected results running an area mail campaign
- Give you a calculator to see if you should run an area mail campaign
In short, this post aims to help you determine if direct mail will provide a positive return on investment.
Direct Mail Advertising Costs: First, Targeted List or Area Mail?
For the most part, the rule of thumb is that if your targeting can’t eliminate 50%+ of the homes in an area, you’re better off doing blanketed area mail and doing targeting based on zip codes.
The reason the 2x rule works is because postage is about 2x cheaper when you’re blanketing an entire area.
As such, area mail also lowers the $$$ needed to run an effective campaign if you’re product can help a ton of people in a specific area.
Usually, most local businesses can help more than 50% of homes in their area, so they go with area mail.
And, Scout has a product (25 cent Scout Area Mail) that’s about 5-10 cents cheaper than the lowest price EDDM options on the market today.
Let’s take a look at the math to understand your return on investment with a Scout Area Mail campaign.
A Case Study of Direct Mail Advertising Costs and Return on Investment.
We recently sent a Scout Area Mail postcard campaign for a solar contractor.
Here’s how it worked out for them by the numbers.
- They paid $2,500 for 10,000 postcards
- 13 tracked calls were generated (0.13% conversion rate)
- 2 closed solar installs (.02% close rate)
- $22,484 in sales via HouseCall Pro.
- At a 20% profit margin they generated $4,496.80.
- For an ROI a little under 2x ($1,996.80 profit)
Great, so how will you know if this will work for you?
The best way to figure out if your direct mail advertising costs will pay for themselves is to calculate your own math.
Where Can I Get 25 Cent Cards?
By this point you should have an idea of your expected return on investment and want to run an area mail campaign.
Here’s how to get going with Scout Area Mail.
Static Scout Area Mail cards are available in two flavors.
- At 25 cents per card there’s a 10k minimum for these zip codes.
- At 25 cents per card there’s a 100k minimum for all other zip codes.
Check that spreadsheet and, if your zip code is available, here’s what to do next
How to Order 25 Cent Cards
Here’s how to get your Scout Area Mail order on.
- Copy all of your desired zip codes from here.
- Send them via here.
- Include the following:
- Headline of the benefit of your service
- An image
- A call to action (ideally, call)
- Social proof (how many installs, customers, etc)
We’ll take care of the rest.