February 2008

How to reduce direct mail production costs
without sacrificing effectiveness
Attention to the following areas can make a
significant difference to your marketing budget. By Dave Henkel

Given the current economic climate, it’s no surprise that businesses are looking for ways to reduce costs. However, reducing marketing efforts is not advisable. Now, more than ever, connecting with customers and prospects regularly is a high priority. The good news is that you can reduce direct mail production costs and still produce relevant, attention-getting direct mail by paying attention to four critical areas in the process:

1. The paper: Although demand has plummeted recently, paper prices are holding quite steady at relatively high levels.  To save money and because “green” considerations are of vital importance today, consider reducing the dimensions of your mail piece, or combining two components, thus using less paper.  Also, you can spend less if you move to a lighter weight paper.  For example, a 20# BRE will cost less than a 24# BRE, and is workable for many situations. Finally, it is often less expensive to choose an alternative to the traditional tightly specified branded papers. If you use your printer’s “in-house” paper, you can usually save money because it is already part of the printer’s inventory, therefore, it avoids the expense of special orders and additional delivery time.
   
   
2. Use of colour: Current technologies have made full-colour digital printing easier to produce than ever before, but it is generally much less expensive to produce that piece using preprinted forms and monochrome laser or ink jet personalization. In spite of the promised impact of full-colour, marketers looking to preserve budgets should consider whether full-colour might be adding cost without truly improving response rates before designing a campaign around a digital variable mailing piece.Some niche products, such as real estate, are ideal for variable digital production, with their low average mail quantities, coupled with the benefits of variable colour for the property and agent photos. For many products and services, these same conditions do not apply: Either the mail quantities are much greater, or the use of colour as a variable mechanism is not likely to enhance response. Most financial, retail and business-to-business mailings are unlikely to show substantially improved response rates for colour digital versus the more conventional, less costly techniques.
   
   
3. List hygiene: Work at mailing fewer pieces based on better data. Take the time to look closely at your list, and consider cutting out the least performing part. By eliminating the lower tier contacts (those predicted less likely to buy or take action), you save both time and money while gaining the latitude needed to focus on those prospects that truly deserve your time and attention. Also be sure to actively eliminate undeliverable names and use tighter merge-purge criteria. The resulting decreases in mail counts will generally be modest and overall campaign efficiency should improve. Carefully consider the product or service you have to offer. A retail grocery or home products store will find the best prospects in the neighbourhood, within a limited range, as opposed to campaigns for products like travel packages, which might be mailed nationwide to a list determined by income levels or previous purchases.
   
   
4. The envelope: Decide if you really need it. Often, a postcard is sufficient to announce a sale or other event at a local retail location or to send consumers to your Web site. Folded self-mailers offer a little more privacy and are relatively low cost.

Communicating with your customers is an investment in every economy. Finding ways to do so both effectively and cost-efficiently will give you a positive return—in more ways than one.

Dave Henkel is president of Johnson and Quin located in Niles Illinois. Johnson & Quin is a national leader in targeted full service direct mail printing and production offering the latest data and personalization technologies. He can be reached at www.j-quin.com.