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How much does Direct Mailing Cost?

Publié par Mike Simpson le

Can we afford a printed neighbourhood mail campaign?

As business owners, we all want to know about costs.  My children, with recent university degrees, are quick to remind me to look at "Return on Investment" when evaluating marketing choices. i.e. if I don't spend, I can't grow! .  They are right, of course, but even if you are trying to make this ROI evaluation, you do need to know the cost!

So let's look at two mailing, 

  1. A new hypothetical  restaurant that needs customers for its takeout service.
  2. A real live mailing of a postcard by the Business Box. Our plan is to mail out 2500 big postcards introducing our services in March 2021. A 10% discount will hopefully generate some traffic to our new website.  This is the first of 3 planned mailings to businesses in the next 4 months.

We can break the costs into three major components,

  1. Design and Planning
  2. Printing
  3. Distribution

1. Design and Planning

When planning a physical mailing job, it is essential to be able to state a specific goal for this marketing effort.  For example, you may want to get 50 quotes for your business in a specific region, so you send our glossy brochures explaining what you do. Or you may be wanting one opportunity for a listing, as many real estate agents often mail out a postcard after they have sold or listed a house in a particular area. Or perhaps you want 100 new customers for your new restaurant, so you send out menus.  In any of these cases, it's important to be able to quantify what results would be considered successful.

Next is deciding on a geographic area.  Starting with a particular municipality, you can decide how many homes need to receive your printing,  Perhaps it would be beneficial to use a "distance from your business" search, rather than specific municipalities.  A landscaper in Beaconsfield South can easily service clients from Baie D'urfe, Kirkland and Pointe Claire, but probably doesn't want to go to Hudson for lawn maintenance, depending on where their company already has contracts.  

So planning is hugely important.  The Business Box is happy to act as a consultant for your neighbourhood mailing project.  We have some specific questions which should help us decide if your mailing will be profitable.

The design of the printed piece is important,  The limitation for a regular charge by the post office is a maximum size of 6"x12" and maximum weight of  30grams.  This is actually pretty heavy, and the 6x12 is a folded size, meaning you could send out an 11x17 sheet, folded in 3.  That allows a ton of information or it also would allow you to share the printing with other complimentary organizations.  A recent example of sharing distribution costs was our mailing for Kirkland Softball and Kirkland Touch football leagues. Each league took one half of the flyer and shared the costs.  Great teamwork!

Our provincial rules require a French only or French/English bilingual flyer.  Often companies will use one side for English and the opposite side for French.  Many customers have designed their own pieces. Most, however, are professionally designed.  If you are in need of a designer, costs can range up to hundreds of dollars. If you are going to be spending a lot on print and distribution, it may be pragmatic to have a professional design to maximize the success rate from your mailing.

If you are not completely confident in your language skills one additional cost may be a translator.  Budget at around $50.00/hour. For our mailings, we just like to have our own translations proofread, and needn't  cost a lot!  For example Valérie Martineau or Traduction Eureka recently offered to proofread and make a few corrections to a postcards for $25.00!  And her work is excellent.

So to summarize, the cost range for planning and design ranges from $0.00 (done internally) to up to $1,000.00 potentially, but usually much less. 

For our restaurant example, we'll use a $500.00 cost to adapt the  restaurant's menu format to a trifolded 8.5 x 11.
The Business Box's real mailing cost $85.00 to have designed and $25.00 to have translation checked.  In addition, we also spent 3-4 hours of time preparing the card and the route.  How do we cost our own time?  Using $50.00 an hour, total cost 85.00+25.00+200.00 = $310.00

2. Printing Costs for Direct Mail

In bigger mailings, we often see that printing cost are much less than the bills we receive from Canada Post.  This is a pleasant surprise for many clients. At the Business Box, we try and stretch the value of your marketing dollar!  For example if your requirements are for more than 10,000 5x7 postcards, we print great 14pt colour postcards for around 7 cents per piece, all bundled and ready for the post office.  

Smaller runs have higher unit costs, but sometimes we can print them more quickly if you have a rush requirement.  

Folded flyers, for our restaurant example, can be printed for a little as 8.5 cents each when we are printing 10,000 pieces.

The Business Box's 2500 postcards are really big! Cost of these would be about $350.00, but our hope is to stand out in the mail received using our size!

3. Distribution costs from Canada Post for Neigbourhood mail.

Canada Post does a great job of getting your message to every home and/or business in your neighbourhood, with their cleverly named, "Neighbourhood Mail" There is a base cost of $0.17 per piece and you can budget one more cent per piece for an internal shipping between post offices.   When printing your neighbourhood mail at the Business Box, ask us about a 2 cent per piece reduction on your distribution cost and we'll get it to the post office on your behalf!

By Targetting customers with a higher chance of success, you can lower your overall cost by reducing number of pieces.  For example, on a simple level, eliminating business clients or apartment dwellers would be more effective for a residential deck building service!  

Conclusion:
In an  example of 10,000 folded menus being delivered to 10,000 homes on the West Island within 5 km of my restaurant total cost will be

$500.00* for design and translation

$850.00* for trifold brochures, banded in 100s

$1600.00*for delivery costs including 100.00 for internal Canada Post shipping

Total  = $2950.00* for 10,000 potential new customers!

If each delivery represents 30.00 profit - the break even would be 100 orders.

A more important measurement may be lifetime value of customer - if each new customer is worth 500.00, you only need 6 customers, OUT OF 10,000, to pay for the mailing!  If you actually create 100 new loyal customers with excellent food and service, you ROI for that mailing, if it had a 1% success rate, could be

$50,000.00/$2,950.00 = 16.95 times ad spend!

For The Business Box's own mailing, costs are

$310.00 for design and planning

$350.00 for print (at selling price- our actual cost is less!)

$375.00 for distribution 

For a total of $1035.00.  If we can generate 25 new business customers (1% conversions) this will have been a huge success.

*These numbers are for representative purposes only - if you are looking for a detailed quote please contact us at The Business Box and we'll see if neighbourhood mail is a good choice for your business.

 

 

 

 

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