Have Direct Mail Costs Gone Down?
The cost to mail a test package today appears to have fallen 17% below the cost to mail the same package ten years ago. Why? Because savings inherent in data processing, personalization, and mailshop fees offset rising costs in every other area of operations.
Observations:
- Technology has saved us some dollars and definitely enabled more personal, targeted, effective marketing.
- In the days ahead, ratios will shift adversely if the cost of manufactured materials goes up (paper, ink, window patch material, labels).
- Rising postage costs would squeeze margins, possibly out of existence. What will mitigate that? Can technology improvements and controlled labor costs offset the trend? So far, no … but technology delivers exponential surprises every day, so let's not give up.
- For now, the real budget killer appears to be energy, gasoline in particular. Business owners also must deal with the rising and fixed energy costs inherent in plant operations. Again, innovations in technology may help us deal with super-charged gasoline and electricity prices. On the other hand, water could prove to be a problem most haven't thought about.
- And then there's the cost of labor. As states across the country try to regulate and repress wages and benefits for millions of American workers, the cost (and availability) of labor becomes vastly uncertain. Enter the influence of trends in the world economy, import/export practices, and even climate change (think paper production, for example): more uncertainty.
Of course, it doesn't really matter what today's costs are vs. ten years ago – lots of things have changed in ten years, including the return on and value of direct marketing. The true comparison would be a cost-to-sale analysis. Now that's something Doc would like to see.