Oct 18, 2017 Direct Mail Impact on Pipeline Velocity (Average Days to Close) – (Average Days to Close for Deals Influenced by DM) / Average Cost of Direct Mail Campaign. This formula gives the number of days each dollar spent on Direct Mail saves you in closing a deal. This analysis only focuses on the cost per response. For more meaningful analysis, you will want to drill down even further to also explore the cost per qualified lead and the cost per order. Comparing direct mail with advertising. Comparing one direct mail campaign with another direct mail campaign is a fairly simple and straightforward process. The most ACCURATE direct mail cost ESTIMATOR to help you plan and prepare the budget for your next direct mail campaign. +1 855.5.MAILING (855.562.4546) [email protected]
As of October of 2020, the new postage rates from the USPS were proposed to be put into effect on January 24, 2021. When there are rate increases, they typically happen in late January after being approved by the PRC (Postal Regulatory Commission), and they commonly impact mailing rates for mail categories across the board. All postal rates vary based on class of mail, weight, automation qualification, and postal processing and services. Below are the proposed and approved 2021 direct mail postal rates your business can expect to pay moving into the new year.
2021 Direct Mail Postal Rates
When planning out your direct mail campaigns, there are quite a few factors to consider. While laying out the perfect graphically designed mailer or assembling your swag packed virtual event welcome kit, you’ll need to consider things like packing size, class of mail, deliverability requirements such as timing and in-hand dates, and postage costs.
Direct mail piece postage rates are also impacted by whether or not they are compatible with the Postal Service’s automated processing equipment. Letters, mailers, or cards that fall within certain size and weight specifications can be automated through the USPS® and may meet your business’ needs and qualify for automated processing. Mailing at automation rates is one of the best ways to save money on postage.
As a rule of thumb, there are 3 primary mail category classifications for postage costs when determining the overall cost of your direct mailers or packages. They are broken out below for easy comparison.
Nonprofit 2021 Postal Rates
If your business is a nonprofit and has applied for and received authorization to mail at nonprofit rates, the USPS offers postage to qualified organizations at a discounted rate. To learn if your organization meets the requirements to receive discounted postal rates on your domestic direct mailers, please visit the USPS Nonprofit Mailer page here. Once you’ve verified that your organization meets the nonprofit authorization requirements and your application has been approved, it’s also important that your mail pieces meet all the specifications to ensure each campaign is compliant.
USPS Marketing Mail 2021 Postal Rates
To receive discounts on bulk marketing mailers through the United States Postal Service, there are minimum requirements that must be met. Marketing mail discounts can apply to a variety of parcels and mailer sizes and weights, and this option grants businesses a few more additional features when sending out their mail pieces. This is often the best option for direct mail campaigns for businesses due to the discounted postage rates vs. the cost of mailing first class.
USPS automation marketing mail 2021 postal rates
First-Class Mail 2021 Postal Rates – Non-Auto and Presorted
First-class mailers are a great option for lightweight direct mail pieces (specifically, those under an ounce, although presorted first-class mail utilizes a higher weight threshold and can be a viable alternative when delivery timing is crucial), and all campaigns where either first-class mail services are required or deemed necessary for other reasons. As with all mail classes, first-class is no different in that it has certain standards and qualifications, and your business mailers must meet specific weight and size requirements to be eligible. However, with First-Class mail, the USPS® also provides options for extra services like mail tracking, signature confirmation, certified and return receipt services and certificates of mailing.
The rate for a First-Class mail letter (1 oz.) is NOT increasing in 2021, and will remain at $0.55. Each additional ounce for First-Class mail will cost $0.20, a five-cent increase from 2020.
Planning direct mail campaigns to take advantage of all possible postal discounts is key to producing mailings that save money and flow through the postal stream as efficiently as possible. ProList’s team can also evaluate your direct mail efforts for additional options, such as Every Door Direct Mail, or EDDM®, which provides additional postal savings for geographically focused campaigns, or analyze it for other postage discounts such as drop shipping to take advantage of NDC (Network Distribution Center) and SCF (Sectional Center Facility) discounts.
As an experienced direct marketing team, ProList can handle everything from designing and planning a mailing to walking you through your postage options to maximize ROI and minimize costs. Rest assured; our team will help you choose the best postal options available for your unique campaign. To get started, give us a call today at 1-888-PROLIST or head to our contact page, here.
What are self-mailers? Are they right for your business? They’re a great way to snag the attention of your audience, but they aren’t for every business
What Are Self-Mailers?
Branded healthcare promotional items are a great way to increase your brand visibility. By providing practical, quality branded items as swag, the multi-functional benefits can’t be ignored!
The Top 10 Healthcare Promotional Items
Not sure how using 3rd party fulfillment services could benefit your business or organization? We’ve put together a quick beginners guide to fulfillment services here, to help get you started.
A Quick Beginners Guide to Fulfillment Services
The direct mail response rate is one of the most common questions we get from clients interested in trying direct mail. Understandably, it is critical to your initial planning and expectations.
But you need to be realistic. Most importantly, you need to be aware that the answer will vary with different direct marketing objectives.
How do you measure response?
The response rate is the simplest, most common form of measuring the results of a direct mail program.
Every Door Direct Mail Cost
The response rate reflects the percentage of people who respond to a mailing.
To determine your response rate, you simply count up the number of responses the mailing generates, then divide by the quantity mailed.
100 responses divided by 5,000 pieces mailed = 2% response rate.
>>>Download our FREE Direct Response Tracking & Analysis Chart
What is the average response rate?
You often hear about 2% being the average response rate. This is true for certain applications and situations, but not for all.
It’s important to understand the applications and situations before you try to predict your response rate.
A 2% response rate is a good approximation if:
1. you are mailing to an outside mailing list (meaning any list that is not your own)
The people on outside mailing lists have no relationship with you. You are a stranger to them so you have an uphill battle when it comes to generating a response.
2. you are using a free offer than requires little commitment on the part of your audience.
Free offers are central to all lead generation campaigns. The concept is simple. You create a free report or white paper on a topic closely related to what you sell. You then offer the report to your target audience – and those people who are interested in the topic will respond. These leads are then considered potential customers.
Because these offers are free, you can expect more people to respond.
Of course, even if these two factors are in place, remember 2% is just the average. You could see a response rate of 1% or lower – which is very likely. Or you could see a response as 3-5% – which is very unlikely.
When 2% doesn’t work
Direct Mail Cost Per Piece
In trying to project response rates for a business plan, 2% could be considered an average response rate (although 1% is safer and more realistic).
However, there are applications and situations in which 2% (or 1%) should not be part of your projections. Here are two scenarios:
1. If instead of mailing to an outside list, you mail to your house list of previous responders, you can expect a higher response rate – possibly several times higher than 2%. The logic should be obvious. The people on your house list already know you and have already demonstrated (from their previous response) some interest in your topic.
In direct marketing, they say “the profit is in the list” – and this is what they mean. This is how catalog and other mail order businesses make their money – by repeat mailings to their house list.
2. If instead of using a free offer, you use a price offer, you can expect to see a lower response rate – often fractions of 1 per cent. This is the difference between order generation and lead generation. In order generation, you are expecting an actual order in the form of a payment or an agreement to pay.
Even if the price is low (or discounted or spread out in payments over time), price is a barrier to high response rates. It’s not unheard of to see response rates as low as 1/10 of 1% (.001).
Don’t overlook response quality
The response rate tells you how many people responded to your mailing, but it doesn’t tell you anything about response quality.
For example, in lead generation, you can generate of leads with a free offer, but how many of those leads will convert into customers?
That should be another part of the equation. You need to think of both the quantity and quality of the response.
Consider, for example, these two mailings: One produces a 2% response rate, but that only 5% of the responses are able to convert to customers. The other produces a 1% response rate, but 30% convert to customers. The numbers should speak for themselves.
Campaign 1 – mailed 10,000
Response Rate: 2% (200 leads)
Conversion Rate: 5% (10 customers)
Net Order Rate: .1% (.001)
Campaign 2 – mailed 10,000
Response Rate: 1% (100 leads)
Convesion Rate: 30% (30 customers)
Net Order Rate: .3% (.003)
Although campaign 2 produces half the initial response rate, the lead quality was significantly higher resulting in a much higher conversion rate.
And don’t forget your mailing costs
Mailing costs are an important consideration when measuring your direct mail results.
Consider, for example, a mailing package that includes multiple components, all printed in four color, fully personalized and mailed first class. This package could cost you $1.50 per piece. Then consider a postcard mailer that when all is added up, would cost you 50 cents per piece.
One package costs $1.50. The other mailer is one-third the cost at 50 cents. Based on a mailing of 10,000 pieces each, the larger mailing would cost $15,000; the postcard mailer would cost $5,000.
Now, what if they produced the same response rate of 1%?
Campaign 1 – 10,000
Cost per piece – $1.50
Total cost – $15,000
Response Rate – 1% (100 responses)
Cost per Response – $150
Campaign 2 – 10,000
Cost per piece – $.50
Total cost – $5,000
Response Rate – 1% (100 responses)
Cost per Response – $50
This analysis only focuses on the cost per response. For more meaningful analysis, you will want to drill down even further to also explore the cost per qualified lead and the cost per order.
Comparing direct mail with advertising
Comparing one direct mail campaign with another direct mail campaign is a fairly simple and straightforward process.
But what if you are running an advertising campaign at the same time? How do you compare the results of your direct mail vs. your advertising?
Direct Mail Cost Per Piece
You compare them on a “cost per response” basis. That is the common denominator between direct mail and advertising (and all marketing for that matter).
Consider this hypothetical example:
Cost per Response: $50
Direct mail campaign
Cost per Response: $33
Download our FREE report: Making Snail Mail Work: 13 Lessons in Direct Mail Strategy
If you’d like to discuss an upcoming campaign – or if you’re looking for ways to improve an existing mailing program – call us and let’s schedule an introductory call.