At the beginning of this year, Australia Post announced it’s unprecedented and definitely unpopular move to increase postage stamps to $1. ‘$1!’ I hear you cry, and yes, it was only a mere 8 years ago they were 50c.
And I have seen a lot of discussion about how this rise has made direct mail uneconomical for many business owners.
The reality is, this is only true if you’re unable to calculate your ROI (Return on Investment) as you should with all marketing.
Here’s an example.
An agent sent a mail out to 1,500 residents recently. Nothing flash, just a single page colour letter detailing some recent sales, and a bit of community info. Out of this, he received 3 appraisal requests and listed one property, selling 3 weeks later.
The cost of the mailout was just over $2,000 all up $1 postage and all. So for his $2,000 investment, he was able to list and sell a property to net a $15,000 commission. So for every $1 he spent, his return was $7.50
Now that same mailout last year would have cost closer to $1600, resulting in an ROI of $9.40(ish) for every dollar spent. Now, of course this is better, but $7.50 is still very good.
Direct mail has a number of benefits above the immediate listing, such as branding and relationship building, but consider the above scenario before writing direct mail off as too expensive.