Marketing — Tool
Measure the impact of Direct Mail
Direct mail is the perfect way to make a personalized connection with each of your customers, allowing you to drive action at every stage of the purchasing journey.
Direct mail campaigns can be a very smart investment for your omni-channel marketing efforts. How smart? Use the calculator below to find out.
How to Use the Calculator
Enter your estimated direct mail budget, campaign and product numbers into each field. Once every field has been completed, your return on marketing dollars will be calculated automatically.
Not sure what to enter? Select a field, and tips will appear in this space.
Need more assistance? Click the button below, enter your information and a USPS® Direct Mail Representative will help you through the process.Connect with USPS
The type of direct mail campaign you choose can have a big impact on overall costs and response rates. Consider the options below to see which will be the best fit for your business.
This refers to the total number of mailpieces you’ll send out in a campaign.
To increase volume beyond your current customers, you may need to purchase a mailing list.
Most mailing list vendors will not rent fewer than 5,000 names at a time. Price breaks are typically offered for higher-volume mailings.
This is the total amount you would like to spend on direct mail. This amount includes purchasing mailing lists, postage and other fees.
Keep these factors in mind as you determine your budget:
Direct mail makes up 14.7% of U.S. media budgets.1 (If you have a separate budget for production costs, the total budget for direct mail may be higher.)
Your budget may need to be adjusted based on the mail type you choose, the print and paper quality, and any special production needs.
Note: In the calculation, we will allocate 30% of your total budget toward the costs to write and design your direct mail. This is based on industry averages. You may be able to improve your return on investment (ROI) percentage by finding a less expensive design option, such as designing the mailpiece in-house. For a calculation that lets you specify more variables, such as design costs, please connect with a USPS® Direct Mail Representative.1 “US Advertising Revenue by Sector report, 2018-2028,” Kagan, a media research group within S&P Global Market Intelligence, February 2019.
This is the gross price a typical customer will pay for the product or service you’ll be promoting in your direct mail.
This refers to the profit margin for each product or service contract that you sell. To calculate this, subtract the cost of the product or service to you, or how much it cost you to obtain it or produce it, from the selling price of the item—what you charge customers.
Selling Price − Cost to Obtain = Gross Profit
This will leave you with the gross profit on your product. Next, divide the gross profit by the selling price to obtain the product’s gross profit margin, typically referred to simply as “profit margin.”
Gross Profit ÷ Selling Price = Product Profit Margin
For every 100 people who will receive your direct mailpiece, how many do you expect to visit your brick-and-mortar or online store, or call you for more information? That’s your response rate.
In 2018, the average response rate for direct mail was 9% for house lists and 4.9% for prospect lists.2 Both rates are higher than industry expectations and surge past the email response rate of just 1%.3
Oversized envelopes, postcards and letter-sized envelopes have the highest response rates.42 “Response Rate Report: Performance and Cost Metrics Across Direct Media,” ANA | DMA, November 2018.
4 Ibid. Please note: these formats have the highest response rates when using house lists.
This is the percentage of responding customers who you project you will be able to convert into paying customers.
For example, if you send out 1,000 direct mailpieces and get a 5% response rate, that will be 50 customers who will visit your store or call you on the phone.
If your close ratio is 50%, you’ll get 25 new sales from your direct mail campaign.
Look at the sales numbers from your previous marketing campaigns to set a benchmark for this number.
Return On Marketing Dollars
Did you get a positive return?
Congratulations! This is the percentage of net profit you’ll realize from your direct mail campaign.
For more advice that will help you save money and create a direct mail campaign that's optimized for your budget and objectives, consult a USPS® direct mail expert.
Did you get a negative return?
Based on the numbers you entered, we’ve calculated a negative return on your direct mail campaign. This can be caused by many factors including response rate, conversion rate, mail type, volume, and costs.
Consider the following:
Check your numbers, make adjustments and try again. For example, consider choosing a less expensive and more impactful mail type, such as postcards.
Also consider the lifetime value of your campaign. Although your first campaign may yield a negative result in terms of immediate sales and return on investment, the overall lifetime value may yield a positive result through increased customer awareness of your business and the products or services you offer.
For more advice that will help you save money and create a direct mail campaign that’s optimized for your budget and objectives consult a USPS® direct mail expert.
Ready to make an impact with direct mail?
Whether you need some direct mail advice or are ready to get started on your campaign, our team of USPS® experts can help:
- Refine your return on investment analysis.
- Provide inspiration with examples of the latest innovations in direct mail.
- Get you up to speed on proven ways to improve customer engagement.
Get started by giving us a bit of information at the link below and we’ll contact you soon.
Connect with USPS
This report is an estimate based on your input only. A complete analysis will be provided by a USPS Direct Mail Representative when you request an audit. Postal rates are based on USPS rates published in January 2016. Subject to change.