How much will it cost?

• Author: Turner, Jim
• Position: Direct Mail Essentials

Of all advertising media, direct mail is probably the most expensive on a cost-per-thousand basis. Yet, it can be the best advertising value in terms of the business

How much does it cost? The answer varies, depending on what you mail. A basic postcard or self-mailer can be created and mailed for as little as perhaps $300 per thousand. A typical #10 envelope package, consisting of a letter, brochure and reply, might cost between $400 and $1,000 per thousand. The wide range of costs is due to the large number of variables in the mailing's contents, such as size, paper quality, number of inks and other factors.

Here's how the key cost components of direct mail add up:

The List

Usually, the more highly targeted and accurate your list is, the more expensive it is. For example, a basic address list without any demographic selections might cost as little as $25 per thousand.

But a highly targeted list--say, affluent homeowners over age 55 with a net worth of $1 million and above--could cost from $40 to $100 or more per thousand, depending on the source and the volume that you buy.

Most lists fall somewhere in between. But the list is no place to skimp on the budget. Buying a poorly maintained list for $25 per thousand can end up costing you much more than a highly accurate list at $75 per thousand. That's because the list determines how many pieces you will print and pay to post, and those costs may total as much as 10 times the cost of the list. So, if your list fails to reach the right prospects, either missing some or reaching unqualified ones, its leverage increases the cost of your mailing significantly.

Lettershop Service

The process of addressing the mailer and preparing it for the post office (sorting, bagging, accounting) flails into a relatively narrow range. For a self-mailer or postcard, it may cost from about $65 per thousand for 10,000 pieces to as little as $25 per thousand for 100,000. The cost of setup makes the smaller quantity relatively more expensive. If the mailing includes a #10 envelope package with inserts, it might add another $20 per thousand.

Postage

Postage costs vary with the amount of processing your lettershop does for you. A postcard can be sent by first-class mail for $230 per thousand...