Categorized | List Building

What Does Direct Marketing Cost?

For the purpose of this article we will be talking about direct mail, telemarketing and email marketing. With direct mail, you can mail out a simple letter, a colourful postcard or small package with a sample of your product. Telemarketing allows you to speak directly to your prospects and inform them of your product or service. An email campaign can be as simple or elaborate as you want, providing your prospects with quick links to your website.

You can also try to do all three! The key to marketing is repetition. By reaching out to your prospects using different marketing methods, you strengthen your initial message. This also gives your prospects a variety of ways to respond, which will improve response rates.

Of course, the costs associated with each direct marketing method will vary for each form. Regardless of the form you choose, there are a few things to think about when setting a budget for your direct marketing campaign.

The first cost is going to be the list you use. Unfortunately, there is no absolute cost to a direct marketing list. Your list cost is going to vary based on what type (mail vs telemarketing vs email) of list it is, how many records are on the list, what data elements it contains (how targeted it is) and how it was sourced (compiled, subscriber, direct source, etc). There is also variance in costs from one list owner to another as their compilation methods vary as well as cost and procedure involved in maintaining the accuracy of the data.

Based on list type, a mailing list is usually cheaper than a telemarketing list as it’s just a name and mailing address. A telemarketing list will have name, mailing address as well as a phone number. The extra cost for the telemarketing list is the extra element of the phone number.

An email list than has name, mailing address and email address will normally also be more than a simple mailing lists. There are email lists that contain just name and email address, and these tend be cheaper. Depending on what kind of marketing campaign you are planning, you might want to steer clear of these email lists as the sourcing of this information might not be entirely reliable.

The more records on a direct marketing list, the cheaper the cost per record. For example, you may pay $.05 per record when purchasing a mailing list with 5,000 names. That same list could cost $.02 per records if you purchase 1,000,000 names. This is because list owners will offer volume discounts.

List owners also impose list minimums. If the number of records falls under their minimum, they will charge a flat rate. This means if they charge $250 for a minimum thousand records, and you only want 500 records, you will still have to pay the $250 minimum.

If you want more targeted lists, or specialty lists, these will cost a bit more. In general, the more data elements, the greater the cost. A simple list of females in Seattle is going to cost less than a list of female nurses in Seattle with a good credit rating who own cats. Although a finely targeted list may cost more, they should perform better than a broadly targeted list. You will have to determine if the added cost is worth the improved response rates.

After the cost of the list, the next expense will be the delivery of your message.

If you choose to send your message out by direct mail, you will have to take the cost of printing and postage into account. By using postcards instead of envelopes, you can almost cut your postage rate in half. If you purchase a large enough mailing list. you can mail out en masse, allowing you to qualify for bulk rates.

If you decide to use telemarketing, the size of your telemarketing list will help determine the cost of your campaign. If your list has only 1,000 names you can probably call the list yourself, keeping the telemarketing campaign in house, which will obviously keep the costs down. If you are working with a large telemarketing list, you might want to consider contacting a call center. A single caller at a call center typically makes around 100 calls per 4-hour shift. Of course you’ll have to pay for the service.

The costs associated with an email marketing campaign are probably some of the lowest. You will have two options, you can either purchase an email list and send the emails out yourself or you can have the list owner deploy the list on your behalf. The size and the frequency of the emails should help you decide which option is best for you. If you plan on emailing to the list very frequently, it would be more cost effective to send them out yourself. However, if you plan on sending out to a large list you might want the list owner to send out the emails on your behalf as they have dedicated servers that are whitelisted allowing for better deliverability.

As mentioned before, there is no straight answer to what a direct marketing campaign is going to cost. It’s like going to a car lot and asking what a car costs. There are many variables that go into the cost of a car – year, make, model, etc. It is the same is with direct marketing. The best advice is to find a knowledgeable list broker who can explain all of these options and help figure out the best direct marketing campaign that will work for you. List brokers don’t charge for their services and will know which is the most cost effective method of direct marketing for your product or service.

Leave a Reply