The last posting dicussed setting of objectives.
Here we present: determining your budget:
There are typically two classes of cost associated with direct mail (or other strategies): fixed (set up) and variable (cost per mailer).
First, calculate your cost per mailer (printing, letter shop, and postage). Next, calculate the quantity of mailers necessary to achieve your objective. Finally, multiply the two.
Adding any one-time set-up costs, e.g. mailer design, to the result is your total program budget.
To calculate cost per mailer, you’ll need to factor the cost of your mailing list, design, printing, fulfillment (letter shop), and postage. Depending on what and how you mail, your cost can range anywhere from twenty five cents to over a dollar.
Let’s assume it is fifty cents: Your monthly budget, then, is $2,000 (4,000 mailers @ $.50).
Let’s say you want to add 10 new patients per month to your practice. A reasonable expected response rate to a mailing for new patients is about one quarter to one half percent. Therefore, (choosing a conservative response rate) the number of mailers per month you will need to send is 10/.0025 or 4,000.
Armed with your budget, you can next perform your benefit/cost calculations, which is Step Three, and the subject of our next Posting.