Right-size your direct mail budget — model your Customer Acquisition Cost and ROI before you…
“Do I need a direct mail agency or can I do this myself?”
Our agency talks to over one-hundred direct mail (DM) prospects a year. In a number of instances, I get the sense that prospects are left wondering, “Do I need a DM agency or can I do this myself?”
Most prospects without—and many with—experience in direct mail are surprised by the extensive technology involved in getting a mailing into the right hands.
The end result is a physical piece of mail. What’s behind it is likely to include any or all of test strategies, modeling, list selection, attribution considerations, response and conversion data collection, and analysis.
Remember: The USPS is geared toward automatable mail. What looks good to the DM uninitiated may not be what it takes to get a reasonable postage rate and, in some cases, may not even be mailable.
Should you hire an agency specializing in direct mail, take our quiz to find out! Here are key points to consider:
- An ongoing vs. a onetime need
Onetime mailings are best suited for small businesses that want to mail a promotion to a local demographic. A well-defined onetime promotion to a clearly defined audience will be a lot easier to pull off internally than multiple mailings over time. Agencies do their best work testing and learning over multiple drops.
Businesses with thousands of customers often have good data on their target. That’s useful because DM is extremely strong in its ability to target prospects. An agency can help you model a customer base of a few thousand and find “look-alike” prospects to mail to. In addition to demo lists, behavioral and trigger lists can be overlaid and tested. Business lists offer similar opportunities.
DM matrices can quickly get complex. It’s easy for the uninitiated to be overwhelmed by target, offer, variable data, and other decisions that directly influence cost and success. An agency can be your guide to best practices and what is most likely to affect results and costs. Production can also be complex. Estimating a DM project requires expertise in data, lists, lettershop services, and postage. Often, multiple vendors need to be coordinated.
- Integrating with a digital campaign
Integrating DM with a digital strategy has been shown to improve overall response. A common misconception is that digital programs are easily “converted” to DM (and vice versa). The mail experience is very different from digital, both from a customer and program development perspective. An agency can guide that process.
- Budget and risk
DM works, but it isn’t cheap, and lots can go wrong to negatively affect response and waste budget. An agency experienced in DM strategy, creative, and production is likely using best practices to develop programs that work and processes that avoid pitfalls that can cost much more than their services.
- What you’re doing isn’t working like it did (or should)
DM is a constant testing and learning medium, so if what you’re doing isn’t working anymore, outside help is in order. Many approaches that previously worked grow tired over time, and objective DM insight can reinvigorate a flagging program. We’ve mailed over one billion packages, but we’re still learning what works and use that to determine what to test next.
What does a DM agency look for in a client? First, a budget that recognizes agency services in addition to the cost of production. Agencies bring focused experience to the table and need to be compensated for the time it takes to understand a client’s business, strategize, research and select vendors, and oversee the production process. If you don’t want or need that value-add, you won’t be happy paying for an agency.
In our case, we look for a commitment to the channel. For new mailers, it’s important to build a program that includes learning in addition to hitting a customer acquisition cost (CAC) target. For experienced mailers, it means an ongoing willingness to test and share data to optimize returns.
Thinking about working with a DM agency? Still not sure? Contact us and walk us through your particular needs.