Despite the fact that we’re living in a digital age, direct mail postcard marketing continues to be a highly-effective marketing tool.
This is evidenced by the number of postcards that make their way to our mailboxes each week – if they didn’t work, companies would stop sending them. Still, many small businesses are hesitant to try postcards due to the initial investment, and it’s a fair question: should you invest in a direct mail postcard printing marketing campaign? Let’s answer it.
What are your goals?
What would your goals be for a direct mail postcard marketing campaign? This is an important consideration, as many companies use postcards to generate qualified leads, while others use them to motivate direct sales.
You need to create clear expectations for a postcard campaign so you can accurately determine its ultimate return on investment. If you’re sending postcards to try to generate new customers, you should know the lifetime value of each customer, which could play significantly into your ROI and decision-making process. So, for example, you might be willing to break even on a postcard campaign in order to earn that lifetime customer value, which will prove very profitable over the long-run.
Work the numbers, and invest only what you can lose
Postcard marketing isn’t rocket science; in fact, there are proven and easy-to-follow postcard business marketing strategies that can help you generate the best possible ROI from your campaigns. That said, you never want to invest more than you can afford to lose. And, you should understand what to expect from your campaign before you send it.
Let’s say you have a product that retails for $200 and nets $100 per sale. You launch a direct-mail postcard marketing campaign that promotes your product’s benefits and offers customers 20 percent off for a limited time. That brings your net down to $60 per sale. Also you print postcards cheap.
A good response rate for any postcard campaign is two percent, but you don’t want to bank on your postcard knocking it out of the park (often, this takes trial and error, as well as continual A/B testing). So, let’s say you can expect a response rate of one percent.
Now, let’s say you plan on printing and mailing 10,000 postcards. Here’s how the initial investment would break down;
Direct mail examples;
- 10,000 standard 4×6 full-color (both sides) postcards: $625
- USPS mailing: $3,405
- Mailing list (if you rent): $200
- Total upfront investment: $4,230
One percent of 10,000 is 100. Multiply that by $60 and you’ll gross $6,000 on the campaign.
Subtract your investment ($4,230) from your gross ($6,000) and you’ll net a profit of $1,770 for this campaign, assuming a one percent response rate. If your response rate hit two percent, you’d profit $7,770. Chances are your campaign will ultimately net somewhere between $1,770 and $7,770, so it’s likely worth taking the risk.
So, should you invest in a direct mailer services postcard marketing campaign?
As mentioned, you should also consider the average lifetime value of each customer. Granted, you’ll have additional marketing strategy investment in bringing customers back, but it’s always cheaper to retain customers than to get new customers. If your customers spend a lot with you over time, a single direct-mail postcard campaign could ultimately net hundreds of thousands or even millions of dollars in lifetime profits.