Direct mail is still proving to be a go-to method for many marketers, with the latest Advertising Association/Warc Expenditure Report revealing that ad spend for direct mail has increased by almost five percent to a record £22.2 billion.
From the format of direct mail to the plans you have in place, a lot of factors can change the budget you put towards your next campaign. Here’s how you can forecast a direct mail budget to set you up for success.
- What’s the Direct Mail Format?
- What’s the Demand?
- What’s the Cost of Acquiring a New Customer?
- Are Your Plans Realistic?
- What’s the Average Budget for Something Similar in Your Sector?
- Internal or External?
When you forecast your direct mail budget, you’ll need to outline the format you plan to use. There are many different types of direct mail that can all excel depending on what they’re being used for from postcards and letters right through to catalogues, brochures and leaflets.
All of the formats are popular, but different businesses in varying sectors have their preferences as to which format to use. That’s why you should plan ahead and decide which format to use as the prices will differ.
For example, sending out detailed catalogues of products will arguably cost a lot more than a simple and straight to the point postcard.
When you’re forecasting your direct mail budget, it’s important you also take into account the actual demand of the marketing materials. You can’t afford to waste your budget by either overspending on direct mail and realising that you don’t have enough customers or even underspending and not sending out enough in time.
That’s why it’s important to see how previous direct mail campaigns have performed and how many readers are showing an interest in the products and services you’re offering.
To do that, though, you need to have a direct mailing list and identify your ideal prospects.
Let’s say you’re sending out direct mail for your jewellery store. You won’t send random postcards or brochures to everyone in the same postcode, for example. The fact is, not everyone is going to be interested in your service so you need to identify the type of people that will buy to gauge the demand.
You should have lists of current customers, people that have responded to businesses similar to years, targeted demographics lists, opt-in lists and more. By seeing how many prospects are ideal, it allows you to create and send the right amount of direct mail.
Another factor to take into account when forecasting your direct mail budget is what the true cost of acquiring a new customer through this approach is.
Obviously, it’s going to cost more to send out direct mail marketing to ideal prospects compared to emails, for example. However, it can certainly help get more customers this way as the marketing materials will always end up in their hands.
What they decide to do after that is their choice.
In comparison, every email that lands in an inbox isn’t always read. While it might seem like the cheaper option, they can easily be deleted without the content within being read, so customers can be missed out through both methods. Look at the previous success you’ve had and work out how many customers you’ve acquired through your direct marketing materials.
If it’s proving to be cost-effective, you can put more of your budget towards it as you’re not wasting a lot of money on poor prospects that don’t end up becoming customers.
Be realistic with what you’re trying to achieve with your direct mail campaigns. Set achievable goals so that you don’t end up wasting too much of your budget on a plan that might not work or convert enough of your prospects into customers.
At the same time, don’t underspend on plans that might be big yet still realistic.
If you find that the plans you have are realistic, then a good chunk of your budget should go towards it. When forecasting your budget, keep your plans into account as the bigger your plans are, the more money you’ll likely need to set aside for your direct mail campaigns.
There’s no harm in seeing what those around you in your sector are doing and how much of their budget is going towards direct mail marketing materials. It should give you a good idea of how much is typically spent in this area so you can spend a similar amount based on how much success they’ve had.
By outlining an average, it makes your next campaign much easier to plan as the results will show whether you need to place more of your budget towards direct marketing or whether you need less than the average.
Also, work out whether you can do this internally or whether your direct mail budget should go towards an external company that can manage it all for you. You’ll need to consider if you can create the designs in-house, how much equipment will cost, if you have the resources to produce and mail your direct mail materials without disrupting the wider business and more.
That’s not the most cost-effective option, so think about if you can manage your budget better and work alongside a company that specialises in mailing services.
In the long run, it can help with mass distribution and eliminate most of the headaches you might face.
External companies have the capacity to design and deliver millions of marketing collateral that are both efficient and extremely effective. Plus, they have the knowledge to help make it all a success by having full end-to-end solutions.
By forecasting a budget beforehand, you’ll know exactly how much of your budget will go towards a direct mail company compared to any surprise costs you might not account for when trying to do it all internally.
Choose the Perfect Direct Mail Solution With Our Services
A budget is the first thing you need to think about when it comes to your next direct mail campaign, but there’s a lot more to consider so that your budget helps your return on investment and doesn’t go to waste. That’s why it’s important to pick an experienced team so if you want to push the envelope of mass distribution, talk to the B&B Press team.
From internal posting to data management services and automated folding and finishing, we’ve got experts in each area determined to make your campaigns a success.
To find out more about the experts behind the machines and showcase the experience on offer, we’ve created a meet the team pack so you can really get to know us.
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