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E-mail or Snail Mail:
A Comparison

I recently did a postcard mailing for a small business customer to, on the surface, promote a new product but primarily as a means to clean up their snail mail database. We knew that the contact data had been neglected but we were surprised at how badly. Out of 2800 postcards mailed, close to a thousand were returned as undeliverable. You think bounces are bad in email marketing, try purging 1,000 records manually. Again, this database had not been actively maintained so the percentage of bad addresses was extremely high for an 'in-house' list.

This experience can serve as a good basis for contrasting the cost efficiencies and time savings available with a similar email-based effort.

For the postcard campaign, we produced the creative in-house using existing artwork which could easily be delivered postally or via email. Our investment in creative was around $200. With the cost of creating the message virtually the same for either medium (e- or snail mail), we will only compare the cost of actually producing the cards and related delivery and handling expenses. We also won't look at the ROI of a postcard vs. email program, that's the basis for another discussion. Suffice it to say that, while declining as the volume of email campaigns increase and the novelty erodes, email response rates continue to outperform direct mail.

Going Postal

We took advantage of a 'sale' by a national postcard vendor to purchase 5,000 cards printed with our message for only $350.00. For an additional $100, the vendor addressed the cards from the database information we provided. In addition, they mailed the cards at the going bulk postcard rate of $0.22/card. The total cost to produce and mail the postcard, excluding creative, was $1,066.00. To process the 'bounced' cards upon their receipt cost another $170 and consumed a full day of clerical time. So the total campaign cost equaled close to $1,240.00 or about $0.44/postcard mailed or $0.69/postcard delivered. If you add in the creative, the costs compute to $0.51 and $0.80 respectively.

Now these costs are not bad for a direct mail campaign but let's take a look at what happens when you go digital...

Riding the Cyber Waves

If this customer had used email as his delivery mechanism, even with a similar bad address percentage, the cost effectiveness of the message would have been significantly higher. We use a email broadcast vendor to deliver emails for this client at a cost of $0.012 per message sent at this volume. The cost of broadcasting the message, therefore, would be about $34.00 (2,800 x $0.012). The cost of processing the 'bounced' addresses was negligible as the service vendor automatically purges bad addresses from our email database. When you add in creative the total cost of the e-campaign was $234 or about $0.085 per email broadcast and $0.13 per email delivered; a difference of more than 600% over the cost of the postal campaign.

Oh, and here's the really cool part...

Email marketing can be considered a closed loop marketing system. In other words, when you send an email not only are you able to process how many messages were undeliverable but you are also able to calculate the percentage of emails opened as well as actions taken by its readers (e.g., clickthroughs). When you tie in web based tracking you can even determine how effectively the campaign generated customers, prospects and advocates (people who recommend your goods and services to others). And you can do this in a fraction of the time that snail mail marketing requires. In fact, it took close to 3 weeks from the time it took us to provide the post card vendor our creative and list and the time it took them to produce the cards, provide us proofs and mail out the postcard. The return mails then took another couple of weeks to trickle back in. How many of the cards were actually viewed, read and acted upon? It's hard to say.

What about the email? Well, since we like to broadcast email on Tuesdays or Wednesdays to generate the best results, then the most we would wait was 6 days and the results of the campaign would be substantially collected within 48 hours of the e-campaign's launch. So we have an email feedback loop that is completed in a minimum of 2 days and a maximum of 8 days compared to 5 weeks for the postal campaign. And, as mentioned above, we have a pretty darn good idea of the number of emails opened and acted upon.

Lessons to Learn

Don't trash your direct mail campaigns just yet but, instead, consider adding email to the mix or increasing the resources allocated to e-campaigns. Email is particularly effective where speed of delivery is critical and the consumer actions you want to motivate by your campaign require little thought or are highly time bound. If a lot of thought is required, direct mail or other media may be the best bet as email ages poorly while a coupon for a brake job can be magneted to the fridge until needed.

Don't neglect your in-house lists, whether for direct mail or email purposes, your house list is gold and should be treated as such. These are prospects and customers who you've already convinced that you're worth at least finding more out about. Make sure you have programs in place to stay in touch with your list; ezines and electronic newsletters can be very effective for this purpose.

If you haven't been capturing email addresses along with physical addresses then you need to start doing so immediately. You might actually want to consider a direct mail campaign aimed at harvesting as many email addresses as you can from your existing snail mail database.

Finally, cut the response time and increase the measurability of your direct mail campaigns by integrating a on-line component into each one. For example, provide a coupon with your direct mail campaign but provide a link to additional savings on your web site.

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