How Much Does an Entire Direct Mail Campaign Cost?

How much can you expect to spend to get a direct mail campaign off the ground? There are a lot of different expenses to consider.

These are the costs for various expenses, priced per thousand. Naturally, the more you order at a time, the lower your expenses will be.

==> Printing Costs

What you're printing will have an impact on how much it costs. By and large, most mail pieces will cost you about $400 to $500 for every thousand letters you print.

==> Postage

Postage fees go up quite regularly. At the beginning of 2012, sending 1,000 letters cost you $450.

This is for first class postage. While you can send direct mail using other kinds of postage, almost all direct mail marketers swear by using first class.

==> Letter Insertion and Postage Licking

Getting either a person or your print shop to stuff the envelopes and place the stamps will typically cost you between $80 and $120 per thousand envelopes.

If you're hand addressing each envelope, as Gary Halbert did with his "Coat of Arms" mailing, you can expect to pay a lot more for this process.

Typically, a mailer label that's stickered onto the envelope or a mechanical pen is used. The costs are much lower, as it's all done by technology. If you have to hire staff to take over the process, it'll naturally hike up your costs.

==> The List

The list typically costs between $500 to $700 for a standard list of 5,000 names. You can't order any smaller than that.

If you have special restrictions on the names, such as "American Express buyers only," you can expect to pay more per name.

==> Phone Line Costs

Phones are too varied to give exact estimates. Potential costs include the costs of wiring in phone lines, purchasing multiple 800 numbers to track different mailer responses, switchboards and people to answer the phones.

You can also outsource your call answering to a call center. You usually need a minimum volume before you can take this route. You're charged either by the minute or by commission.

==> Cost of Producing the Product

Finally, you need to produce enough product to meet the demand that'll come from a successful mailer.

You shouldn't over-produce, however, or that'll just turn into tied-up inventory and wasted cash. Instead, produce just enough to fulfill the demand on a mediocre hit, while making sure your fulfillment company can handle a large unexpected hit of volume.

Start by producing enough product for a 0.4% response rate. If you mail 20,000 letters for example, produce 80 products. Make sure your fulfillment company can handle as much as a 2% response rate on short notice.

These are some of the most important expenses to consider when you're prepping a direct mail campaign.