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Pricing and Costs of Direct Marketing

business.com editorial staff
business.com editorial staff

Set a budget for your company's direct marketing campaign

  • Direct marketing involves campaigns that come directly from a business without the use of an advertising agency. Examples of direct marketing include telemarketing, direct mail, social media marketing and email solicitations.

  • Set a budget for your company's direct marketing campaign and create a direct marketing plan that fits in with your goals and resources.

  • Partner with printing agencies and digital desktop publishers to create a professional and innovative direct marketing campaign.

What is direct marketing?

Direct marketing means the retailer targets customers directly with advertisements without using an agency to manage marketing efforts. This type of marketing involves attempting to reach each client on an individual basis to garner responses.

Direct marketing campaigns are perfect for test-driving a campaign before a larger launch or for smaller operations with limited ad budgets. Budgets for direct marketing campaigns are very customizable based on the target audience and the desired reach. Furthermore, direct marketing efforts can be done in small batches and sent to different customer bases until you find a campaign that connects and promises a significant return on investment.

Types of direct marketing

Direct marketing campaigns come in all shapes and sizes. Types of direct marketing may include direct selling to clients, but that is only one form of direct marketing. There are varying types of direct marketing forms including online versions and traditional strategies. Traditional forms of direct marketing include direct mail, leaflets, and telemarketing.

With direct mail, posted mail is sent to prospective clients about your products and services in your current market. Leaflet or flyer distribution is another form of direct marketing used by companies. Telemarketing involves using a call center to reach out to well-researched prospects.

Online and virtual forms of direct marketing include email, text, and social media campaigns. Email promotions can be sent to a targeted list of prospective and established clients. Social media campaigns can be geotargeted for better responses. Text (SMS) messaging direct marketing campaigns have recently surged in popularity over the last five years.  

Set a budget for your company's direct marketing campaign

There are many forms of direct marketing, but the most common is direct mail. Using this method, you create a letter, postcard or package to send out to customers in your target market. Prices vary for each form, with postcard marketing being the least expensive. Sending packages with samples is the most costly. You can target consumer markets as well as do B2B direct marketing.

Regardless of the form you choose, there are a few things to think about when setting a budget for your company's campaign. It's best to determine your budget before you start working with a direct marketing company. Consider the following:

  1. You'll have to come up with a catchy design for your direct mail package. Direct marketing agencies can help you create and put together a great promotion.

  2. Determining how to reach your target market can be a challenge. If you don't know who you want to send your ads to, you may need to buy a mailing list.

  3. Postage rates will play a large part in the cost of your direct sales campaign. Bulk rates can help keep the cost down.

Use affordable direct marketing firms when creating your promotion

The challenge here is to find a firm that can deliver what you need while staying within the budget you've set. If you want someone to design your postcard or package, expect to pay at least $50 for this service. Getting the direct mail items printed and put together can cost as little as 4 cents per piece; at the opposite end of the spectrum, you can spend as much as you desire to make a promotional piece work for you.

Target customers with direct marketing lists

Mailing lists are surprisingly affordable, starting at around $10 for 1,000 addresses. Some companies do impose minimums, so be prepared to spend at least $100 for a list. If you want more targeted lists, or specialty lists, these will cost a bit more, but in general, you should be able to choose certain demographics to help you narrow your list.

Consider the postage rates for your direct marketing products

It seems that postage rates are always going up. By using postcards instead of envelopes, you can cut your postage rate in half. Also, since you're sending out mail en masse, you may qualify for bulk rates, which can save you up to 20 cents per piece. The United States Postal Service requires that you pay an annual mailing fee of about $200 to get this service, so you'll have to decide if you're doing enough bulk mailings for this to be worth it.

  • If you're looking for direct marketing in the form of telemarketing, you'll need to contact different companies to obtain price quotes. The consultants at direct marketing companies can help you create a campaign that fits into your budget, but expect to pay at least a few thousand dollars.

  • The pricing and costs of direct marketing via email are probably some of the lowest. If you do it yourself, it's practically free. If you choose to get some direct marketing assistance from a professional, you may have to pay consulting and design fees as well as fees for database administration. This can cost anywhere from a few hundred dollars to thousands, depending on how extensive your campaign is.
Image Credit: Sushiman / Getty Images
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