Is there such a thing as being too targeted with your mailing list options?
This seems like an odd question that would have a simple answer. Of course you want to drill down and mail only to the people that represent your target audience and are most likely to buy from you!
Direct mail is a top choice for advertisers because it allows for a very targeted approach to getting your message into the hands of the right consumer. The options for purchasing a specific mailing list are endless, and data can be very powerful. It’s easy for marketers to get lost in this and forget about the fundamental reason for doing direct mail marketing in the first place.
Return On Investment!
It is important that the company you choose to help you with your print and direct mail campaign understands your business, who you want to target, and knows all the costs associated with executing a proper direct mail campaign.
Let’s take a look at the three primary costs for running a direct mail campaign and how they can impact your ROI:
- Graphic Design & Printing: For the sake of this article, let’s lump these two services together. The bottom line is that you need a company that understands how to create a strategic and impactful design AND lands you the best price for printing. Not all graphic designers, agencies, and direct mail facilities are created equal. Choose wisely.
- Mailing List: A good mailing list is critical to a successful direct mail campaign. It is important to understand that the deeper you dig into specific data, the more expensive the mailing list becomes. Additionally, if the audience you are looking to target is more obscure, there is a greater chance that the mailing list will be compiled using data modeling. This means the mailing list may not have consumers that are guaranteed to fit your desired profile. Model driven data uses buying trends and behaviors that match what the list provider deems similar to your target market. It is critical that your direct mail provider has a deep understanding of the available options for developing a mailing list.
- Postage: Did you know that there is a direct correlation between your mailing list and postage rate? Understanding postage rates and how to get the best pricing can be extremely complex. Generally speaking, the more targeted your mailing list is, the higher the postage rate will be. Depending on your target audience and mailing list, postage could be anywhere from $0.16 to $0.48 per piece. This is wide range, which means it is extremely important that your direct mail company understands how the post office works, how to process your list, and how to acquire the lowest postage rates available through the USPS.
Now that we understand the main components of a direct mail campaign, let’s get back to the original question posed.
Is it possible to be too targeted with your direct mail approach?
Let’s take the example of the hair salon that focuses on advertising to higher income females. We will assume in following 2 scenarios that we will be mailing a postcard that includes a holiday promotion for purchasing gift certificates to 10,000 recipients.
Scenario 1: Targeted Mail Strategy
In this scenario, we will buy a mailing list that only includes females between the ages of 25 and 65 with an income level greater than $60,000 a year.
Due to the nature of purchasing a specific list and only targeting females that fit the demographic, the cost to mail 10,000 postcards would be $0.49 per piece. The total cost of the mailing is $4,900 including mailing list and postage.
Scenario 2: Saturation Mail Strategy
In this scenario, we use a saturation mailing list and base our strategy on the demographics within the carrier routes in our mailing area. We will review the average income levels of the carrier routes surrounding the hair salon and strategically select the routes that have higher income levels. We can’t guarantee that we will only target females within the desired demographic since we will be including lower income homes that reside within the carrier routes we select.
Because we are using a saturation (bulk) mailing list, we are now paying a much lower postage rate. The cost to mail 10,000 postcards is now $0.33 per piece landing us at a grand total of $3,300 including mailing list and postage.
Yes, a saturation mailing list is less expensive, but let’s say we increase our saturation mailing budget to $4,900 as shown in Scenario 1. The increase in budget now allows us to mail to 15,300 addresses instead of only 10,000.
So after looking at these two scenarios, we have to ask ourselves one key question. If we decide to maximize the $4,900 budget, would we get a better return on investment by:
- Mailing 10,000 targeted addresses to the specific customer profile? or
- Mailing 15,300 saturation mailers to strategic carrier routes?
The answer is not always black and white. A few things to keep in mind.
- It is important to have a full understanding of all the available options before proceeding with any direct mail campaign.
- It is essential to partner with a direct mail company that you can trust to work with you closely. They need to have a true understanding of your business, audience, and the message you wish to convey.
- You need to understand the exact costs of your campaign. Choose a mailing list option that will provide you with the greatest return on investment. This is the name of the game.
Too targeted? The lesson learned here is that you need to target your audience AND find the most cost effective way to do so within your mailing list options. This way you drive the highest amount of sales and profit possible!
So which strategy works best for your type of business?
Contact us today for a free consultation. We would be glad to discuss the available options for targeted and bulk saturation mailings.
Brian Johnson – President