If you work in direct mail, you’ve likely heard by now that paper costs are increasing substantially and on a regular basis.  Industry partners are advising us to expect a 6.5% increase every six months or so.  This is worth noting because until recently, we sometimes went a year or two with very little increase.

Increased demands for paper, closed paper mills, employers paying higher wages to attract workers—even energy prices—all contribute to higher costs. In each step along the way, from harvesting a tree to printing a letter, prices have gone up and we expect them to continue to rise.

Here at MWD, we’re consistently investigating the best ways to manage cost increases and keep our projects on track, on time, and within the budget. We’ve found a few strategies to help minimize rising costs in direct mail programs.

Print more all at once.

If you can plan ahead and place larger print orders, that can help save money.  Can you order 6 months’ worth of envelopes all at once?  Printers often offer lower prices for larger orders. Or create a letter/reply form that is universal enough to allow its use in several mailings.  Design your letter and reply device art in such a way that you can update banners and copy with variable lasering.

Perform cadence testing.

If you have donors you suspect are less responsive to direct mail—like lapsed, online-originated, or very low-dollar names—consider omitting those individuals for a few mailings.  Or take the time right now to determine if these audiences really need every mailing on the schedule.  For our clients, we run cadence tests on different audience segments to determine the optimal number of contacts.

It’s easy to do: Identify the audience you want to test and randomly divide the names into two groups.  Mail one-half the full schedule of mailings, while the other half receives every other or even every third mailing. Do a comparative analysis of the two groups and their response, overall contribution, net revenue, and retention.

While we are strong proponents of an active and effective resolicitation program, you may find some donor groups can receive fewer mailings without hurting retention.  And, while more mailings always mean more gross revenue, some donor audiences don’t cover the cost, leading to lower net.  If you need to cut costs while maintaining net income and file health, testing mail frequency across different audiences could give you a big win.

Test your package components.

Does a 4-page letter work better than a 2-page letter?  Test it!  If the 2-page letter doesn’t hurt response rate or average gift, you’ve just saved 50% of your paper costs.  Additional inserts like coupons or short notes should all be tested to see if they really contribute to a higher response rate or average gift.  Or look for places in your art design where you might be able to incorporate the content from an additional component.  For example, does your package have a secondary letter or note from someone endorsing your organization?  Try adding a pertinent quote to your main letter, maybe as an interesting graphic element.

While we all hope the current supply challenges and rising costs improve with time, we also know we’re facing a future with increased production costs. These ideas are a start in the ongoing work for direct mail production cost efficiency. There’s more to explore, and we’re eager to learn what might be working for your program.

 

Jan Rossberg, (she/her), Account Executive and Employee-Owner has over 25 years in the direct marketing, fundraising industry. Before joining Mal Warwick Donordigital, Jan worked at Craver Matthew Smith and later at O’Brien McConnell and Pearson. Over the years her work experience has included project management, graphic design, print and mail production, and even coordinating telemarketing campaigns. Jan loves to read, travel, and visit museums.