I’m often asked, what is the ROI (return on investment) for Informed Delivery? A fair question which requires a little explaining to answer.
Direct mail is a numbers game. Investment is involved – mail is not free – and a return expected. The value of that return varies widely depending on the type of organization, goal of the mailing, and how you measure the value of each response. Are you trying to make a direct profit from this mailing on its own, or are you looking at lifetime value? Is it an acquisition mailing? A renewal? Regardless of how you measure, there are two numbers that matter: Your investment, and your return. So, you want to minimize your cost while you maximize your response. Informed Delivery is one means of accomplishing both.
What are the essential numbers you are looking for in your campaign?
Reducing Postage
The Postal Service certainly makes the investment side of the equation tough to control with twice-a-year rate increases. Before the latest increase, postage for a Commercial Marketing Mail 5-digit letter, inducted at an SCF, was 29.5 cents. For nonprofits, the same piece was 13.8 cents. As of July 14, 2024, postage on those same pieces will cost you 31.8 cents and 14.6 cents, respectively. I chose that rate because it represents the base postage being paid by most comminglers – 5-digit mail deposited at an SCF. So, your Marketing Mail letter is costing you about two cents (7.7%) more than it did a few weeks ago. For nonprofits, it’s just under a penny (5.8%) more.
Let’s apply today’s rates to a 50,000-piece mailing:
- Commercial Rates: 50,000@ $.318: $15,900
- Nonprofit Rates: 50,000@ $.146: $7,300
To mitigate the constant rate increases, the Postal Service offers a range of promotions. This year the Informed Delivery promotion begins on August 1. For qualified mailings, there is a 4% discount available. Our 50,000-piece mailing saves $636 with commercial rates, and $292 for nonprofit. There is also an incentive built in for the eDoc submitter, typically the mail service provider, of .5% of the postage. For our 50,000-piece mailing, this works out to about $80 for the commercial mail, and $36.50 for the nonprofit.
Of course, the bigger the mailing, the larger the savings can be.
Additional Impressions – A Lot of Them
The reason the Postal Service offers these incentives is to encourage mailers to use innovative services to improve response – and it works. Let’s look at the response side of the equation.
Informed Delivery sends an email digest to subscribers every morning with black and white images of what will be in their mailbox that day. Mailers have the option of adding a clickable “ride-along” ad underneath the image and replacing the mail piece image with a full-color image, while still including the ride-along. The benefits of doing this are many. Among them:
- A direct connection between your mail piece and you web presence
- Additional ad impressions
- A direct clickable link to your offer that consumers are comfortable clicking because it comes from the Postal Service
- Pieces with Informed Delivery campaigns attached go to the top of the digest listing
- Reinforcement of brand image
- A postage discount
And the numbers are big. More than 65 million consumers now subscribe to Informed Delivery – about one in three households. And those consumers love it – typically about 70% of Informed Delivery emails are opened and read.
So, with our 50,000-piece mailing, about 17,000 prospects are going get an Informed Delivery email, and 70% of them are going to open it to see your piece image and ride-along ad. That adds up to nearly 12,000 additional impressions, 12,000 opportunities to click and respond.
The Numbers All Add Up
Informed Delivery saves you postage:
- For commercial Marketing Mail about $13/M
- For nonprofit Marketing Mail about $6/M
- For First-Class Mail about $25/M
Informed Delivery boosts response:
- Additional impressions: Typically, 25%
- Additional opportunities to respond
- Clickable link to 25% of prospects
Qualifying for the Informed Delivery promotion isn’t hard, but it does require registering for the promotion and getting each campaign approved. SnailWorks helps process hundreds of Informed Delivery campaigns every month. We can do the same for you.
Contact us to learn more.