Complete Guide to Direct-Mail Marketing: Advantages and Costs

A pink and aqua ombre background with an image of an envelope in the middle to represent direct mail

Ecommerce entrepreneurs have virtually unlimited ways to sell—via their websites, through e-retailers, directly through social media, and through email campaigns—just to name a few. With all of these digital avenues, it might come as a surprise that an analog option—sending customers something in the mail—is on the rise. Here’s how to make the most of this marketing channel.

What is direct-mail marketing?

Direct mail is any kind of physical promotional material that a company mails to customers or prospects. These promotions typically take the form of:

  • Brochures
  • Letters
  • Flyers
  • Newsletters
  • Catalogs
  • Postcards
  • Coupon envelopes
  • Packages

The underlying idea behind direct mail is that receiving mail appeals to people’s emotions, boosts recognition, drives purchases, and creates relationships.

Is direct mail an effective form of marketing?

A 2021 report from the United States Postal Service revealed that some industries—including automotive, financial services, and retail—are allocating more of their marketing budget to direct mail than any other channel, including email, digital media, paid social, and SEO. But marketing spend aside, is it actually effective? A few key indicators point to the impact of direct mail.

High response rates

According to research by printing company American Litho, direct-mail responses (the inquiries or contact made by a direct-mail recipient) are 10 to 30 times higher than response rate averages from email marketing campaigns. Email campaigns average a 0.6% response rate, while the average response rate for national direct-mail campaigns varies from 2.7% to 4.4%.

The Association of National Advertisers reports higher projections, with email getting a 1% response rate on average and direct mail getting a response rate as high as 9%. Research by the Data & Marketing Association says that consumers engage with 96% of direct mail.

Strong emotional response and brand recall

A 2019 study used neuromarketing techniques to measure consumers’ visual attention, emotional response, and brain activity when exposed to advertisements. Print elicited stronger emotions, was more memorable and vivid, and made consumers feel that the products or services were more desirable or valuable than digital advertising. Plus, people like getting mail: 75% of respondents to a USPS survey said that getting mail makes them feel special, while 37% said they received marketing emails “way too often,” and 90% found targeted ads annoying.

That neurological advantage of print extends to brand recall. One study by TrueImpact says that direct mail requires 21% less cognitive effort to process compared to digital media, resulting in a 70% increase in brand recall from direct mail compared to digital ads.

High ROI

The return on investment (ROI) for direct mail is higher than other channels, according to the ANA. For instance, of six channels: email, social, paid search, digital display, direct mail, and SMS, companies used email the most (82%), reporting a 93% ROI. But direct mail, the underdog among the channels, used less than half as frequently as email, reported a 112% ROI—the highest of all the channels.

Amplifies the impact of email marketing

Marrying email newsletter campaigns with direct-mail components can increase sales by a significant margin. In an Harvard Business Review case study, a company that added direct mail to its email campaign experienced a 49% lift in sales and 125% lift in inquiries, with 90% of customers surveyed browsing the catalog and keeping it for an average of seven days.

Is direct mail expensive?

Direct mail can be expensive, depending on how elaborate your campaign is. It is not quite as simple as mailing out a bunch of postcards and waiting for results. There are various costs that go into a direct-mail marketing campaign:

  • Setup cost. The most effective direct-mail campaigns are targeted, so if you don’t already have a database of customer and potential customer mailing addresses, you may need to buy a mailing list from a direct-mail provider, or even a mailing list broker. Pricing varies—you might pay for a one- or two-time use, or for a flat fee for unlimited uses. According to list broker LeadsPlease, a mailing list can cost north of $250 per 1,000 names and addresses.
  • Media cost. The amount you pay for actual materials like paper, ink, stamps, and envelopes is the media cost.
  • Creative cost. If you employ a designer, copywriter, and printer, these fees will also add to your overall direct-mail costs.
  • Postage cost. USPS offers bulk direct marketing mail prices for a minimum quantity of 200 pieces.
  • Cost to continue. Direct-mail marketing services may charge a subscription fee, which covers redesigns, reprints, and even discretionary costs.

USPS has a direct-mail cost estimator tool, which will also allow you to submit your budget for an estimate. For instance, it estimates about $800 for creating, printing, and mailing 500 letters in envelopes using USPS Marketing Mail rates. (Keep in mind that these costs vary based on the materials you use, whether you purchase a list or use your own, and whether you hire creative talent.) Its estimate is based on purchasing a list for 15¢ per address; $484 for design; printing costs of 21¢ per piece, and mailing at 29¢ per piece.

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How to create a direct-mail campaign in 5 steps

  1. Create a target mailing list
  2. Design an effective marketing campaign
  3. Consider a test drive
  4. Streamline your mailing process
  5. Track your campaign

Do these five things to reach your target audience, track your campaign’s effectiveness, and set yourself up for successful direct-mail campaigns.

1. Create a target mailing list

To start, divide your customer base into groups of people that share characteristics. To do this, you can tap into your own customer database or buy lists from brokers that create custom lists by interest or activity, such as people who have just moved in, new parents, or people who are in ZIP codes with a certain median income, for instance. Make sure that if you’re using an existing mailing list, you scrub it for inaccuracies or contacts that have moved.

2. Design an effective marketing campaign

Consider the goal of your direct-mail campaign. Do you want to announce a sale, provide coupons, or get customers right to your website? The clearer your intention for a designed piece, the more effective it will be. Create a prominent headline that announces your calling card. For instance, “Chicago’s legendary pizza arrives in Santa Monica,” or “Enduring Arrangements: fresh flowers for two weeks.” Effective direct-mail campaigns include a clear call to action (CTA) prompting customers to act on a deadline, collect a giveaway, or take advantage of a private sale.

Along with your headline, your CTA and offer should stand out clearly. Use simple and impactful design so that your customer will understand what you’re offering right away. You’ll want customers to recognize your company anywhere they see your advertising, so create a mailer that mirrors the design and message of your emails, advertising, and social media.

3. Consider a test drive

For a first campaign, you may want to start with a small list and a limited run of mailings to determine average response rates. This can help you decide what kind of volume you want to work with in the future.

4. Streamline your mailing process

Depending on the size of your mailing, you might want to consider handing over your job to a direct-mail marketing company, which can print your design, clean and reformat your mailing list, and mail your campaign for you. The USPS offers discounted bulk rates for mail that’s presorted by three digits in the ZIP code, and even deeper discounts for presorted mail with the same five digits. Direct-mail marketing companies often offer this presorting service. If you’re going the DIY route, consult USPS for minimum numbers of pieces. For instance, the required minimum for first-class mail is 500 pieces, and for marketing mail it’s 200 pieces (or 50 pounds).

5. Track your campaign

To track your results, you can share a unique promo code with responders or share a unique email address for them to reach out to with questions about your product. You might also include QR codes or short, simple links that will take customers and prospects right to your site. When your customer scans a QR code on a piece of direct mail, it not only directs them straight to a specific landing page, but it can also allow you to track the engagement of your marketing campaign.

3 tips for a successful direct-mail campaign

You can increase the success of your direct-mail campaign by using tools and best practices.

Offer a discount

Offer freebies, coupons, or discounts that encourage customers to act now. Companies like cosmetics company BOOM! By Cindy Joseph and supplement brand Obvi both topped 1,000% ROI by offering a simple discount code as a “win back” to repeat customers who had exceeded a certain number of days since their last purchase.

Don’t let it stand alone

Integrate direct mail into your multichannel campaigns. Shopify apps such as PostPilot Postcard Marketing, Poplar Mail, and Sweet Analytics and Reporting specialize in direct-mail campaigns, marketing analytics, and even designing direct-mail pieces that can help you integrate your campaign into your overall marketing strategy.

Keep it simple

Good design and copy is not wordy or overly involved—and depending on your campaign, a less expensive piece (like a postcard) may be just as effective as an elaborate die-cut package.

Direct mail FAQ

How do I target the right audience with my direct-mail campaign?

You might consider using a combination of lists to reach your target audience:

  • Use your own list of contacts and customers. Your internal database contains customers that already know your product. You can use marketing automation tools that trigger a mailing: for instance, if a customer recently bought your basic recipe- and meal-planning subscription, your automated mailing list might suggest they level up to the next subscription tier.
  • Research your audience, then employ a direct-mail marketing company to optimize your list and deploy your mailing. You can research demographics using focus groups, ZIP codes that likely contain your desired audience, and surveys, and then turn your findings over to a direct-mail marketing company that can purge old information, prepare your mailing for the lowest postage, and mail your pieces for you.
  • Use the full services of a list broker and mail marketing company. You can share your goals and an audience profile with a broker, who will create mailing list recommendations, develop a full target list to your specifications, and mail your pieces.

How do I measure the success of my direct-mail campaign?

Key performance indicators (KPIs) for direct-mail marketing include the response rate, conversion rate, cost per acquisition, revenue per order, and ROI. Compare them to your other marketing strategies and against industry averages.

How does direct mail compare to email marketing?

Direct mail is more expensive than email marketing and not used as frequently. However, it has been shown to be as or more effective in reaching a targeted audience, creating brand recognition, and converting interest to sales.