2 Reasons Direct Mail Is Worth the Investment

16 June 2020 / By Mike Gunderson
2 Reasons Direct Mail Is Worth the Investment on gundersondirect.com
Reading time: 4 minutes

Don’t let expenses associated with direct mail scare you away — many mailers earn an outstanding return on investment.

In many ways, direct mail can appear more expensive than digital marketing channels in terms of up-front investment. It does require some capital to develop, print, and send your mailer, and sometimes that initial investment is higher than the costs of email or online marketing. But when it’s done right — with a well-executed mailpiece, campaign strategy, and measurement — direct mail is one of the most predictable and profitable marketing tactics available today.

The direct mail investment

The USPS mailing costs calculator estimates campaign costs ranging from roughly 39 cents to $3 and more per piece depending on quantity, format, data, and other factors. At Gunderson, when calculating cost per acquisitions, a pilot direct mail program typically ranges between .75 and .85 cents per mailpiece.

These costs include the design and printing process, and the fact that each paid postage will run you about 26 cents.

However, at the same time, direct mail offers a 29% return on investment, according to research by the DMA, and performs far better than paid search and online display. When considering the combined ROI and conversion of direct mail, the overall performance of this channel is hard to beat.

Reason #1: Readers respond to direct mail

One of the main reasons to go ahead with a direct mail campaign is that your prospects are more likely to respond to it than other marketing methods. A campaign of 100,000 mailpieces often gets a response of .5% to 1.5%. Even higher response rates are possible with a high-quality mailer, a compelling offer, and careful targeting.

Why is the response rate so good?

Well, it starts with getting a physical item into someone’s home.

According to Epsilon Data Management, 73% of consumers like receiving direct mail because they can look at the material whenever they wish.

From there, direct mail tends to stay inside the home for an average of 17 days, suggests a report by Go Inspire Group, a UK-based marketing firm. As a result, once you send the material, you can end up with 17 days of residual marketing.

This residual marketing is vital because it gives people within a household the chance to review a potential purchase. By providing customers with a physical item to share and discuss, you can make the collaborative part of the buying process more convenient, helping your sales.

There’s also the fact that customers cannot abandon a physical address like they can with an email address. Research by Marketing Profs reports that 57% of all email addresses are abandoned because the owner was receiving too many unwanted emails.

Once these email inboxes got out of control, the individual simply made a new one. Consumers can’t easily abandon a physical address, however, and even new movers are usually listed in the USPS New Mover files. With direct mail, you know that your marketing is reaching a human being and being considered.

All these aspects come together to create a more responsive environment for direct mail marketers, helping to earn these advertisers a higher return on their investment.

Reason #2: The ROI justifies the cost

Of course, it all comes down to your ROI, and the return that you receive throughout your direct mail campaigns should justify the costs.

As mentioned before, these campaigns get a return of about 29%, although your mileage may vary based on what you’re selling and the techniques that you use. In plain English, this 29% return means that for every $100 you spend on direct mail marketing, you’ll make $129.

But why is the return so good?

Small Business Trends reports that as much as 90% of direct mail is opened, while email only gets an open rate of between 20% and 30% (and some email is opened much less frequently).

While email has an ROI of 124% in the research above, that’s almost entirely due to its low costs, not its success rate.

The reason people take the time to open direct mail is that it’s comparatively rare and well-attuned to their needs. Anytime an individual accesses his or her email account, there are likely numerous marketing messages there. Because there are so many, very few are actually opened.

The same person might only have one or two items arrive in the mail on any given day, making it easier to go through the offers and seriously consider them.

Cutting through the clutter of email is reason enough to look at direct mail because it allows you to escape the competition of the inbox and head straight to the consumer.

Putting a profitable direct mail campaign together

Sure, you’ll need some capital to get your direct mail campaign off the ground. Still, this advertising method moves very quickly, especially if you send prospects who receive your material to your website to place an order. From there, you can start making sales rapidly, earning a positive return on your investment.

Gunderson Direct can assist you throughout your direct mail campaign, helping you to design and develop your material, create your lists, and send your collateral to your prospects. Head to our contact page to learn more or to begin your first campaign.

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About The Author

Mike Gunderson

Mike Gunderson is the founder of Gunderson Direct, Inc., a direct marketing agency that helps businesses drive new leads and close more sales through traditional offline channels, especially direct mail.