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

Let’s face it — many business people are taking a closer and closer look at their marketing costs. And as the world faces an uncertain economy, our clients have been asking us for ideas on how to save money on their direct mail marketing.

That saying attributed to Ben Franklin certainly holds true, a penny saved is a penny earned.

With that in mind, here are three time-tested tips that could save you far more than a few pennies. In fact, if you follow these strategies, you could save 10%, 20%, or even more on your direct mail marketing. After all, direct mail remains one of the most effective ways to grow sales, prospect for leads, and stay in touch with prospects. With the Postalytics platform, you can easily create cost-effective triggered direct mail campaigns to fit any marketing goal.

#1. Grow Your Own Mailing List & Save Money On Direct Mail

Most direct mail marketers start by renting outside lists. That’s okay, but as your marketing program gets rolling, you can build your own mailing list by keeping a database of the responses you get from your mailings.

You see, when you rent a list, you can pay anywhere from $50 to $100 per thousand pieces mailed. That’s for each mailing. In most cases, you don’t buy a mailing list, but rent it for one-time use. Over mailing after mailing, those costs add up. Use a list that you own, and that expense falls to zero.

So how do you build your own mailing list? You can start with a rented list, but just use it to prime your marketing pump.

Check out the ultimate guide to direct mail lists

Make sure your offer is a good one, strong enough to drive your audience to respond – to provide or confirm their mailing address whether completing an online form or by phone.

That offer can be a coupon, free guide, or other relevant information that’s compelling enough to engage your audience to respond and provide not only their mailing address, but other information about their needs and wants that enhances your database.

Why is this important? You already mailed to this group. Why would you need to re-capture this information?

Because once your target responds — you now own the data, you’re no longer renting it from your list provider.

For example, here’s an example of a direct mail postcard that offers a refinancing offer to a consumer audience:

The offer to respond online or call their local representative allows the company to capture the mailing address and other important data to grow its own list of consumers. This list is even more valuable because they’ve expressed interest in refinancing.

And this example shows how a company selling medical staffing services to hospitals gathers leads they can add their database through an promo code offer for a $100 Amazon gift card.

B2B marketers know that in addition to identifying a business that may be interested, it’s also important to pinpoint the person in the appropriate role who can make a purchase decision.  A good offer will boost response rates so you can send follow-up triggered drip campaigns – with no need to pay list rental fees.

#2. Lower Your Cost Per Piece — Buy Direct Mail Credits In Bulk

Mailers that send out huge batches of hundreds of thousands of mail pieces at a time have traditionally been able to mail at low prices. The less a direct mail piece costs, the higher the ROI for each response.

Those discounts are available because they’re buying in bulk. Until recently, this gave the big guys a huge advantage over smaller competitors.

But now new technology is helping to level the playing field. Direct mail automation platforms like Postalytics enable smaller mailers to get similar savings on each piece of mail.

Buy A Block Of Credits, Send Mail Over Time

With tools like direct mail credits, smaller mailers are able to buy in bulk without the need to send out massive batch campaigns like the traditional big mailers do.

It just requires a little planning. Here’s how it works.

First, rather than using too many creative formats, smaller mailers can gain significant savings by consolidating into just a few, highly optimized mailing formats.

For example, you might find that a large 6 x 11 postcard performs just as well as a letter package and slightly better than your mailings with smaller postcards.

Let’s say that over the upcoming 6 months you plan to send 30,000 pieces of mail out, with 20,000 pieces being sent in small batches of 5,000 each, and 10,000 pieces to be sent out via several triggered drip campaigns on a daily basis. The cost breakdown might look like this:

	# pieces	per piece fee	total
6 x 9 standard postcard	10,000	$.57	$5,700
6 x 11 standard postcard	10,000	$.62	$6,200
1 page letter standard	10,000	$.66	$6,600
Total	30,000	$.62 (average)	$18,500

Rather than using 3 formats, consolidating that purchase into one single creative format offers big savings!

6 x 11 standard postcard

30,000

$.56

$16,800

As you can see, the per piece fee dropped by $.06 per piece for the standard class mail 6 x 11 postcard. The total impact on the consolidation of creative into a single format is $1,700, or over 9%!

#3. Don’t Send Mail To Invalid Addresses

There are few guarantees when it comes to direct mail, but I can say this with absolute certainty: Any mailing you send that’s undeliverable won’t generate a response. So clean your list. As you wash your hands more frequently given current global health concerns, think about scrubbing your mailing list of undeliverable names more often, too.

The more mailers you send that are actually delivered, the better your results will be. That’s why direct mail experts emphasize the importance of  “list hygiene.” Given that about 10 to 15 percent of the population moves every year, a consumer list that hasn’t been purged of undeliverable names and addresses could be wasting you lots of cash.

How do direct mailers scrub their lists? Traditionally, they’d wait for the USPS to return their mailers to them, then manually update databases — mailer by mailer.

Like most old, non-automated processes, it takes a long time (weeks to collect returned mailers), and a whole lot of typing by people that gets tedious and time consuming.

As you can imagine, today there’s better technology that makes this easier and less expensive  For example, Postalytics automatically captures USPS return to sender scans, and then updates lists to mark addresses as “Invalid” so these addresses are not sent in future mailings.

Here are several ways that modern direct mail automation tools eliminate invalid addresses and save money on direct mail campaigns:

• Scrub lists on import for invalid addresses, zip codes, state codes
• Run every mailing through the CASS database from the USPS
• Run every mailing through the NCOA database from the USPS
• Mark “Return to Sender” and “Forwarded” addresses as “Invalid” for future touches to the same list

How To Save Money With A Clean List

Let’s assume you have a list of 1,000 names and addresses and your mailing results show that 10% of them (a total of 100) are undeliverable. Removing those names means that you won’t be mailing 100 pieces to people who will never respond. If your per piece mailing costs are $.80 cents each, that’s $80 in savings.

Or to put it another way,  your cost per piece that’s actually delivered drops as this example shows:

Measuring Cost Per Piece Mail AND Delivered

	Existing List	Cleaned List
Quantity Mailed	1,000	1,000
Cost (@ $.80/each)	$800	$800
Deliverability Rate	90%	99%
Pieces Delivered	900	990
Cost Per Piece Mailed	$.80	$.80
Cost Per Piece Delivered	$.89	$.81

So here’s an easy way to possibly save 8 cents per piece. Just make sure your list gets a clean bill of health — and stays clean as a whistle.

Oh, and if you’re marketing to businesses, consider that people change jobs quite frequently. Even if they stay at the same company, they may be promoted into another role or move to a new division. Try your best to track your prospects so you’re consistently up to date.

The best part is, with new tools like Postalytics, you get future savings the more you mail to your list. That’s why so many clients are utilizing our multiple touch mailings features.

How Savings On Direct Mail Add Up

If you follow just one of the strategies I’ve presented, you’ll see that you can spend less and achieve similar results. Follow all three and you can get a bigger bang for your buck. In many cases, Postalytics clients can save $.24 per mailer. That’s $240 per thousand pieces mailed. If your response rates remain steady, those savings become substantial.

Take a look: Let’s say you’ve been mailing a postcards that with an average cost of $.80 each. Here’s how these three savings tips save money on direct mail:

	Before Savings Mailing			Savings Strategy			Savings
Rent vs. Buy	Renting Mailing List	$.10		Build List	$.00		$.10
Credits	Multiple Formats	$.62		Consolidate & buy credits	$.56		$.06
List Status	Unmaintained	$.08		Cleaned List	$.00		$.08
	Total Cost Per Piece	$.80			$.56		$.24

Total savings? About 30%! That’s way more than a penny or two! And each of these three strategies can be easily implemented. Now here’s an extra bonus tip that can you’re your direct mail program perform even better.

Bonus Tip: Refine & Segment Messaging To Boost Results

Although this tactic does not cut your actual mailing expenses, it can make your mailing program a lot more cost effective.  This is a way to save money on direct mail by lowering your cost per lead and cost per sale. Here’s how:

As I’ve mentioned, the offer in your mailing can make or break your campaign. Without an offer, you haven’t given anyone a reason to respond. And that offer needs to be compelling and relevant. For example, offering a free home improvement guide might be a good offer for a construction company, but not for an insurance broker.

As you continue mailing, you should continue to test offers – and test more specific messaging that aligns with both your offer and segments of your market.  As you do so, you can refine your offer and message with more precision for specific segments.

If you’re a life insurance broker, you might begin to test more precise approaches for the same offer. Let’s say you now offer a general guide on tips for purchasing the best policy that meets a customer’s needs – and that it performs well at generating leads. Perhaps you average a consistent 2% response rate.

Now consider customizing your message or even creating a slightly different version of that guide for two segments – one version for families with no children and another for families that do have children. If each mailing is more relevant to the unique needs of these groups, you could see a boost in response because your message will resonate more clearly. If so, perhaps each group now responds at a rate of 2.5%:

Here’s a chart that compares these two approaches:

	Non Segmented Mailing		Segmented Mailing		Total
			Families with no children	Families with children
Message	General Message		Specific to younger families	Focus on protecting children
Quantity Mailed	2,000		1,000	1,000	2,000
Response Rate	2%		2.5%	2.5%	2.5%
Leads Generated	40		25	25	50

Now you’re generating 25 leads per thousand pieces mailed instead of only 20. While this does not cut your direct mail costs, it does save money on direct mail by reducing your cost per lead!

	Non segmented mailing	Segmented mailing
Quantity mailed	1,000	1,000
Cost ($.56 per)	$560	$560
Response rate	2%	2.5%
Leads generated	20	25
Cost per lead	$28.00	$22.40
		20% less per lead

Who wouldn’t want to spend 20% less per lead?

It gets even better. In many cases, a more relevant offer boosts your conversion rate – the number of prospects who actually end up making a purchase.

If, for example, your conversion rate now stands at about 25%, that means that at a $28 cost per lead, your cost per sale is $112 ($28 divided by 25% or .25).

What if that more relevant offer attracted a more qualified group of leads – perhaps increasing your conversion rate to 33%? Here’s how that looks both in terms of response and conversions

	Non segmented mailing	Segmented mailing
Quantity mailed	1,000	1,000
Cost (at $.56)	$560	$560
Response rate	2%	2.5%
Leads Generated	20	25
Cost per lead	$28	$22.40
Conversion rate	25%	33%
Sales	5	8.25
Cost per sale	$112	$67.88

Now you’ve cut your cost per sale nearly in half!

Pennies Count: Don’t Miss Opportunities To Save On Direct Mail With Modern Tools

Back in Ben Franklin’s days, mailing a letter only cost a few pennies. Today the cost is a lot higher, but those pennies add up. As marketing becomes more essential in an ever-more challenging environment, you’ve got to spend money a lot more wisely.

So do all you can to save money on direct mail and improve your results so you can run a more profitable marketing program.