Unlocking Profits: How to Minimize Costs and Maximize ROI with Postcard Marketing
Discover how to optimize your postcard marketing strategy to achieve maximum ROI while keeping costs in check. Learn tips and insights to make every dollar count!
High Impact Postcard Marketing
Postcard marketing is unique among marketing channels in that it operates along an extended timescale. Campaigns can trigger response within hours of delivery, or results may take months to materialize.
Those new to direct mail as a marketing channel may be tempted to take a short-term view and want to judge impact based on immediate returns.
But the nature of a tangible, real-world mail piece is that recipients have the luxury of considering your offer on their own time. Taking a wider perspective will enhance your ability to make key decisions in the strategic planning of your campaign.
Leveraging Lifetime Value
High Profit Advertising
Customer lifetime value (LTV) is a measure of the value created by a customer over their entire purchase lifecycle.
One powerful change in perspective is looking at the profitability of a campaign based not just on the immediate leads or sales generated but by longer term factors like loyalty and LTV.
An advantage of having a higher LTV is the ability to leverage it for more profitable advertising by extending the value of the return beyond an initial purchase.
Calculating LTV
There are a number of options for coming up with the lifetime value of your customers, generally divided between a historical versus forward-looking calculation.
A simple top-down calculation (forward-looking):
(total annual revenue / total annual customers) * average customer lifetime in years
And a simple bottom-up strategy (historical):
sum of individual customer lifetime values / number of customers
Tracking Key Campaign Costs
3 Lenses to Measure Costs
Looking at the costs of your campaign, you want to pay attention to what return you will be getting and not just the sticker price.
Cost per piece. This is a measure of how much each mail piece costs. You may find that lower cost pieces work just as well as more pricier ones.
Cost per lead. This indicator starts to tell you about the effectiveness of your campaign by specifying how much it costs to get a certain level of response.
Cost to acquire a customer (CAC). This value takes into account the conversion of response into actual revenue and new customers. Part will be due to the quality of your response and part will be a result of the sales and conversion backend that you have in place to handle response.
The Cost Per Lead Equation
Use this equation to analyze campaign effectiveness:
Cost per lead = cost per mailpiece / response rate
Strategies to Reduce Costs
Direct mail has the advantage of being able to control costs with the mechanics of your campaign strategy. Here are some examples:
Joint Campaigns. Split costs for significant savings by partnering with adjacents businesses.
Do-It-Yourself. Shop around and combine best values for design, mailing list, printing and mailing.
Targeting. Lower the number of mail pieces you need to send to conver a specific area by narrowing to a targeted audience. This strategy cuts waste as well as enables more targeted messaging for higher effectiveness.
Testing. Determine which costs matter and which are unnessary by testing campaign factors such as mailing lists, mail piece size, and postage.
Volume. Take advantage of efficiencies of scale by investing in higher volumes with reduced pricing.
Boost Your Postcard Marketing ROI
An essential strategy for boosting your ROI is to combine direct mail with other marketing channels. These could include:
- yard signs
- door hangers
- digital ad retargeting
- calls for social share
- email capture and nurture
- connecting to content like video or PDFs
And once your campaign has done its job and generated response, you'll want to take a closer look at increasing conversions on that response to max out your ROI.