What's a good PRICE POINT to determine a Direct Mail Campaign?

Ricky Breslin

Let's say I have 10,000 home addresses of past customers. I've never saw a reason to do a snail mail campaign to them for a sale, or a new DVD which costs between 30$ - 50$ because of the price point.

My question is, at which price point is a good starting position for going forward with doing a DM campaign to past customers?

MichaelWinicki

Quote:

Originally Posted by Ricky

Let's say I have 10,000 home addresses of past customers. I've never saw a reason to do a snail mail campaign to them for a sale, or a new DVD which costs between 30$ - 50$ because of the price point.

My question is, at which price point is a good starting position for going forward with doing a DM campaign to past customers?

Ricky,

It's not the "price-point" that's critical... but the $$$ in gross profit per sale. At the current cost of doing direct mail ($500 per 1,000 letters mailed for a basic sales letter to a list that you already own), I would think you would need to earn $35 in gross profit per sale (at least). Figuring a 2% response (which is probably a conservative figure considering this is your house list) you would net $2,000 after mailing 10,000 letters.

I know of many mailers that routinely garner a 5% response to their "house list" provided the item they're offering is suitably fitted to that list.

Mr. Subtle

Before I ever do a direct mailing I always run the numbers through one of my simple spreadsheets.

Here's what your DVD mailing would look like. The numbers are broken down per 1000 and whatever the actual mailing will be (on the right). Yours is 10,000 so that's why I have the "10". The actual costs on the postcard mailing, dvd manufacturing costs and postage are pretty close estimates.

http://i14.tinypic.com/2nl4umd.jpg

I agree with Winicki when he said your house list will return a much higher response rate than mailing to a cold list. A month or so ago I posted a screendump of one of Ben Suarez's mailings and he usually averaged from 4-8% (response) on his house lists. Since you're selling a similar product that was purchased before, I would guess you should get a pretty good response.

Not sure why you want to do a direct mailing since, I'm assuming, all your customers have bought from you through the net and you should have their e-mails on file.

Ricky Breslin

Thanks a lot for that Subtle.

JanetB

Ricky,

When I first read this post, I knew I had just read something very good on the subject but could not for the life of me remember what it was.

Today I got part 2 - it's from Robert Middleton's Action Plan blog. I love Robert Middleton.

Here's the link to part 1, and it includes links to other entries, including today's part 2:

The More Clients Blog: The Mailing Challenge

Hope this is helpful!

Namaste,

Janet

Mr. Subtle

Janet, I would also post your link in the "Postcard Delirium" thread. My guess is that most don't read every thread and the link you posted above would provide some good food for thought on the subject of postcard mailings.

tubs

Ricky

Also think of the benefits of reactivating your list. Your initial mailout might be unprofitable, but if it gets people into a continuity program, or gives you a smaller list of frequent buyers to work, then it might be worth losing money initially.

Hugh