When it comes to direct mail in Canada, 5 cents represents the following:
5 cents – the difference between Standard Machineable and Non-machineable Addressed Admail
5 cents – the amount you can save by conforming to the machineable specifications
5 cents – the cost of being different
It is interesting how we can look at 5 cents from such different perspectives. In one case, where we are mailing a standard piece in an envelope or using a standard postcard, we want to be able to save the 5 cents, so it only makes sense to conform to the machineable specifications. After all, it is much easier today, given the recent relaxation in requirements, and we are no longer subject to surcharges if we experience poor read rates.
On the other hand, we can look at the 5 cents as an investment in being different, should we want to mail something like a die cut, which can help us stand out and be noticed.
It is very easy to quantify the savings by conforming to the machineable specifications. It is simply $0.05 times the volume. However, “being different” is just one aspect of a direct marketing campaign and you must also consider your target audience, timing, copy, graphics, your call to action and offer. Therefore, just because something stands out and is different, it does not guarantee success. Nor can we say that being different will increase associated revenues by a stated amount.
However, being different can certainly help. To this point, we have mailed millions of die cuts in various forms, with some programs running continuously for over three years. Further, we often speak of another campaign that delivered $12 in annual recurring revenue for every $1.47 invested. Although the all-in cost per piece mailed was $16, this clearly illustrates that it is not as much the cost as the results that can be delivered by being different.
Getting back to 5 cents, 5 cents, 5 cents, in some cases, the cost of being different today is actually 7.5 cents. That is because, up until January 12 of this year, many of our customers mailing into local communities were enjoying average rates of around $0.425. This was due to tiered pricing under Letter Carrier Presort (LCP), where we enjoyed lower rates with higher geographic concentrations. These same customers mailing die cuts today are now paying $0.50 per piece. That’s an increase of 17.6%
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So, for these direct marketers the question will be, is it worth an additional 7.5 cents to continue being different? We are pleased that, although we have seen adjustments in volumes, no one has abandoned any programs to this point.
I expect that some readers are thinking that we must also consider the cost of a die cut as compared to a standard postcard, and this is true. As postcard prices vary considerably, based on volume and the extent to which variable data is used, we cannot give you exact pricing. However, in our experience, print costs for a die cut 6” Roundcard will be about 33% to 50% more than a rectangular 5” x 7” card. Therefore, if a 5” x 7” rectangular card costs you $0.22, a 6” round die cut, should be in the $0.29 to $0.33 range, which give us an average incremental cost of about $0.09. If we add this to the 5 cent difference between Standard Machineable and Non-machineable Addressed Admail we get $0.14, which would be an estimated cost of being different in 2015 (net of mail preparation costs, which can vary based on different conditions).
It is reasonable to assume that there will always be some additional costs associated with being different and being really different can cost a lot more. But, when it comes to your piece standing out in a handful of mail, an incremental cost of 15 to even 20 cents per piece might seem modest based on the additional revenue it could return. Further, when we compare the incremental cost of die cuts to some of the elaborate packaging we use for mailing product samples, die cuts offer outstanding value.
So, if you want to take the plunge and spend a little (or a lot) more to mail something different, just ensure that you consider the other essential items mentioned above, which include: target audience, timing, copy, graphics, your call to action and offer. Mailing things that stand out can make a difference and, when properly planned and executed, they are usually well worth the investment.
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