The return on investment of a mailing can be difficult to calculate. With any mailing, you are creating brand awareness and increasing the exposure of your organization. Your goal is to turn brand awareness into a response.
We have developed the following table based on various size mailings and the potential return on investment. Please keep in mind that these are estimated figures. Your mailing could cost more or less depending on your mailing piece, the quantity ordered, and the company you use.
| 5,000 name mailing |
10,000 name mailing |
20,000 name mailing |
50,000 name mailing |
100,000 name mailing |
|
|---|---|---|---|---|---|
| Rental (approximately 10 cents per household) | $500 | $975 | $1,925 | $4,775 | $9,525 |
| Printing, addressing, and postage (approximately 90 cents per household) | $4,000 | $8,000 | $16,000 | $40,000 | $80,000 |
| Approximate total cost | $4,500 | $8,975 | $17,925 | $44,775 | $89,525 |
A typical mailing will generate a 1- to 5-percent response rate, depending upon your mission and offer. For example, if you were giving away $100 to each person who responded, and your target audience believed you, you would probably see a 100-percent response rate.
Keep in mind that the goal of direct mail marketing is to generate an initial response and then cultivate a relationship with your potential donor, thus converting them into a lifetime donor. Some organizations have found that the lifetime value of a donor is approximately $400.
The following table offers a glimpse of a possible 3-percent response rate and the return on investment if the individuals were single time donors versus lifetime donors.
| 5,000 name mailing |
10,000 name mailing |
20,000 name mailing |
50,000 name mailing |
100,000 name mailing |
|
|---|---|---|---|---|---|
| 3-percent response rate | 150 | 300 | 600 | 1,500 | 3,000 |
| Single time gift ($20) | $3,000 | $6,000 | $12,000 | $30,000 | $60,000 |
| Potential lifetime giving ($400) | $60,000 | $120,000 | $240,000 | $600,000 | $1.2 million |