US Data Corporation Direct Marketing Blog

Why EDDM Is Bad for Business9:06 am


By Don Morrison

why eddm bad deal marketers1 Why EDDM Is Bad for Business

What’s more important to your business – Expense or Profit?

Take a closer look at EDDM (Every Door Direct Mail)… Can you say “junk mail” at its worst?

The post office would have us believe that you should not send marketing messages to the “right target at the right time”… You should send your message to “Everyone – Every door – Every time”.  Let’s look at both sides of the question above.

Expense:

The post office is advertising on TV, (what a waste of taxpayer $), that you can send your mail without a name or address to every door for “as low as $.145 per piece”… (It’s perfect wording – I use it in my cable efforts: You can get digital phone & cable for “as low as $49.95”… but of course there are limitations).  And with the EDDM there are many limitations.

First – You must mail to every household in a carrier’s route… even if the property is vacant, (they are in the count you’ll get), or if the household has a “vacation hold” for their mail. Remember, this is the same USPS that told us marketers to “clean up our lists” so they don’t have to throw away undeliverable mail!

Second – You must mail to every household in a carrier’s route… so you must print enough pieces to send out to all households!  What if my best customer is a family with 2 kids and has a household income of $100,000 and they like to travel?  Forget targeting to the 250 best targets in your marketing area…The USPS would have us just print 2,500 pieces and send them to everyone!  At $.145 postage for EDDM, that would come to $362.50; or I could send to the 250 best targets for an average postage of, say, $.28 per piece & a targeted list of $.15 (standard bulk mail) for a cost of $107.50!

Extend the numbers out to a true “effective marketing plan” – Say you mail 2,500 every other month: 15,000 pieces per year – WOW I only paid $.145 for postage – $2,175. BUT, my “best prospect” is only 250 homes – so I really only should have spent $645 (.43 x 1500 pieces).

Remember – I’m ONLY talking about the postage & list expense here… you’ll still have to print your larger “flat sized” pieces to qualify for this special program. And, yes, you’ll have to print 5-10 times as many pieces as well to cover “every door”.

And forget about being “environmentally friendly”!  Just print more pieces!  The Post Office loves this!

Now let’s look at the Profit side of the equation…

Profit:

First – Is EVERYONE in my marketing area a good prospect?  If the answer is yes, why are they not knocking on your door? Maybe you make pizza, maybe you’re a dry cleaner… If not, consider this: Most of the time we marketers understand that there are certain demographics, certain lifestyles, and many characteristics of our “best customers”.  Did you know that only 5-8% of a bank’s customer base is profitable?  Ask any bank president – he’ll tell you that “not every customer is a good customer”. That also means that “not every prospect is a good prospect!”

So, targeted marketing is the only way to truly be effective as a marketer. Taking the small numbers in the example above, (2,500 in my market area when only 250 are my best target), Return on Investment (ROI) calculations mean I can expect to gain 5 customers in my market area each time I send a mail piece…

EDDM Targeted Marketing
# of Pieces 2,500 Pieces 250 Pieces
List Expense $0 $37.50 ($.15 Ordered in Quantity)
Postage Expense $362.50 ($.145 x 2,500) $70.00 (Standard Bulk Rate x 250)
Printing Expense $1,125.00 $112.50
Mailing Expense $0 (Prepared by Hand) $100.00
Total Expense $1,487.50 $320.00
Total New Customers 5 5
Cost per New Customer $297.50 $64.00

What would you like to spend for a new customer? How much TO GET TO THE SAME 5 CUSTOMERS?  $297.50 or $64?  You could end up spending 4-5 times more to get a new customer if you take marketing advice from the post office!

Again, there are many other factors that will make a difference in your overall ROI on a targeted marketing project. Why print 15,000 pieces when you only need 1,500?  In that case, why print 25,000 pieces for a marketing effort when you only need to print 5,000?  I haven’t even touched on the cost of printing a larger piece, i.e. to print a “flat sized” piece vs. a “letter sized” piece. Don’t forget, you’ll also have to print a lot more pieces!

Forget it if your “geography” is a few counties, or a portion of a state. I did a list count today in an area that had over 500,000 households and, with just a bit of targeting, I’m recommending a mailing of 10,000 pieces…

Oh yes, and “personalization” makes more responsive direct mail pieces! Just ask the DMA or even the post office… They used to preach “targeting” back in the day when they were in the black. Now in the red, they have rolled out this “as low as $.145 per piece” cost for postage…. And it’s sooooo easy! Of course, they don’t tell you that you have to put a “facing slip” on every bundle OF 50 PIECES… and submit their forms with the number per carrier route & the 3602 for your mailing. We mailers have been doing that for the post office “saturation mail” for years!

Targeted marketing is responsible marketing, and, it GENERATES MORE PROFITS!

Yes, there is a place for “saturation mail”, but it’s certainly not as easy, or cost effective, or as profitable as the postal commercials make it seem.

  • http://www.bigdaddydeals.org Jerry

    This article brings up a lot of good reasons to use targeted mail instead of Every Door Direct Mail. The best businesses to use EDDM are ones that the products and services are used regularly such as restaurants, car wash, bakery and pizza places.

    In addition, in some areas, you can advertise in a Co-Op mailer using EDDM that will bring the cost way down.

  • Neil

    Interesting that you would have a direct mail blog and state that the USPS commercials are a waste of taxpayers dollars. The U.S. Postal Service pays its own way through revenue generated from postage sales. Additionally I would think that someone with a marketing background would understand the benefits of TV advertising… You may have even heard the term ROI???

  • Jeff

    This is a great article, as I was comparing both options (direct mail with list and EDDM). From any business point of view, expense is always the greatest issue, and making sure you get the most ROI from your expense. Where did you get the printing cost from? I can get 2500 postcards from
    planoprints.com for $129.99. In my opinion, EDDM is great for service businesses as you can pick your area. Take for example, you have an area that had plenty of hail damage- so you focus on that area and distribute your mailing. Or- an college town would be an great example. However this is probably the worst option to get business to business. I wonder if they have an option you can choose residential or commercial?

    • Rick Jensen

      they do have the option. check local postmaster

  • http://locsavings.com Jennifer

    @Jeff: they do have the option to choose either residential only or residential and businesses, but I don’t think they have the option to just choose businesses.

    I agree that it does come down to costs, but how can you assume that you will only get the 5 clients you would get with the targeted campaign in the EDDM campaign as well? You think that you really would not get a single extra client when sending to a local area that encompasses 10x more ground? The printing expense seems bloated too and could vary depending on the size of the mailer, coating, and options.

    I do believe you are correct about focusing on one’s ROI, but I believe you have better odds of a better ROI with a larger audience. It’s no more ‘spam’ mail than ValuPak or Clipper Magazine in my opinion.

    • Rick Jensen

      You can do just Business address but talk to your locl postmast. It is not something they are pushing.

  • John Leininger

    I just had a student cite your blog in a report. I am going to have to put limits on this in the future. Other comments have pointed out that the USPS does not receive any money from the taxpayer of this country, but congress still controls what they do. Congress also gets to mail all sorts of things for free. If Congress paid for their mail things would be better for the USPS, you lost all credibility at this point. Sorry, I got off point. The USPS is not suggesting that EDDM be used in place of personalized targeted mail; it is not designed for lead generation. It has a systemic approach to reach people in a specific geographical region and they limit the number of pieces you can send out in a day. It is designed for small business that are looking to target locally, businesses that have no idea how to create a targeted personalize mail campaign and would not typically be in the habit of going out and creating a large scale campaign. Be fair and present the facts, you do a disservice to the in experienced reader that does not know the topic. Personalize targeted direct mail has a place and so does EDDM, tell them the right and wrong places to use it. One of the goals of the USPS was to offer an option of delivering marketing material that has been delivered through the local newspapers.

  • http://www.myeddm.com Michael

    This article is a one sided debate, I produce EDDM mailers for my customers every day and many say they love it. I will agree that a targeted mailer is more accurate but that only works for existing customers. Now let me use an example of who benefits from Every Door Direct Mail. One of my customers has a property maintenance company and has 4 houses in a community of about 500 homes. Customer wants to gain new customers in this neighborhood so he does a mail campaign to 500 homes in this commmunity. By targeting the community as a whole they know who he is, that he is serving this community and with EDDM you send oversize mail pieces that look professional. EDDM can make your business if you know how to use it.

  • USPS

    Actually, this article has a lot of faulty information.

    The United States Postal Serivice is the ONLY gonvernment company that uses NO tax payer dollars. Please do your research before posting information
    Thank you.

    • Mr Perfect

      Yes, please do your homework. The USPS is not a Government Company and Government is spelled Government, not gonvernment. Please use spellcheck!

  • http://www.usdatacorporation.com Don Morrison

    Thanks for all the comments… we appreciate the lively debate! While EDDM can fill a niche with the truly Local, Local business (within a small, few hundred of households), using the targeting available to match best prospects is a much more efficient way to decrease expense and increase profits (ROI). Many comments on the Post Office – I don’t claim to know the inner workings of how this government agency is not funded by taxpayer dollars… I know I fund it every time I purchase a stamp or fill my permit. Maybe Congress will find a way to fund the at risk pensions without using any of our “taxpayer” dollars… maybe.

  • ken

    Dear Don

    I have a better idea let us just sit around and hope business walks though the door. First yes target marketing is probably the best type of marketing. But if you are selling anything of substance you are going to have to spend more than the $320, Any marketer worth his or her salt knows 1.) that bulk rate is known as the “dumpster rate” so cut the delivered pieces in half 2. You probably need a mail piece that cost a buck or two. With that said, You did however fail to mention that a local business gets upwards of 80% of their business from a 3-5 mile radius. Take that mailer add a irresistible offer, along with a Qr Code, send your potential customer to a daily deal, or capture their phone number, do a do sms campaign or offer them a free app with push notification and offer them more irresistible offers at a later time. Then take that prospect turn him or her into a loyal customer with a lifetime value of $6000 ( average lifetime Value of a restaurant customer) That’s when you can call yourself a marketer. that’s what you can do for 14.5 cent.
    PS
    If you understood direct response you would not have written this article the way you did
    Thanks

    • Elvis

      amen…

      • Mike

        the sheer amount of people who will use a QR code or download a restaurants APP is just about none. your direct response principals are great, but you are using extremely silly methods of delivery.

  • cc

    oh my god dont be so frickin dramatic for 250 person mailer that would be a joke and the response would be garage it only takes one good lead and its a numbers game. Lets face it look who posted this he is a list broker and he is pissed off that he cant ripp off anyone with buying overpriced list

  • Alpha Mail

    EDDM works Very well if you want to target a specific neighborhood. Likewise if one is targeting specific demographics then traditional direct marketing is for you. As for printing at $1,125, wth? My total cost was $590 including printing and postage for 2,500 postcards.
    Each has a value and yes EDDM requires more work and research but I’ve found it to be productive.

    • Kenny

      what company did you use for the printing?

      • Guest

        I can Get you 2500 Pcs Printed for $230…UV Coated both sides….Email me at William@WmWashington.com

      • William Washington

        I can get you 2500 Pcs Size 6″ X 12″ Direct Mail PostCards Printed for $265. Email Me At William@WmWashington

    • John

      $590 for 2500 who did your printing?

  • Lee Sonneville

    What a load of baloney. Who on earth would pay $1200 to print 2500 postcards? Costs me like $150.

  • Rick Jensen

    USPS Not tax payer funded. Empty home are excluded from the list. everybody practically needs haircuts, auto work, car wash, dry cleaners, pizza, church. In short nothing is a panacea not even highly targeted mail. EDDM is a great way to reach people for certain business that are geographically targeted and build a data base for more targeted mailings, email and text blasts. Keep and open mind.

  • Elvis

    Ignorance is bliss. This article is soo false. from beginning to end. The post office has actually changed their ways and EDDM has actually made me money because I received customers that I didn’t think I would get because I sent it out to an area. Plus you don’t have to send out 2,500 pieces at a time. You can just send the route that you want so if the house equal up 250 homes the average homes in a route is usually 500 at $0.145 which is $72.50 in which by one of your sales you would receive profit already. Please talk of what you know thank you.

  • Vegas air duct cleaners

    You are so wrong printing is .04 per piece and works great made so much money

  • Arash

    Dear author,

    It’s understandable that EDDM is threatening your business (which I assume is direct marketing). Cursing and fighting something as big as USPS would not help you though. Try to embrace the change in your environment and adopt. Otherwise you will simply fall behind.

  • WD

    Just got a call from the local Post Office. EDDM is now 16 cents. The one good idea they ever had and now they’re screwing it up.

  • Robin

    EDDM is part of my marketing strategy for a large franchise and to print 2000 pieces and ship my total cost is $420! We see a big spike in sales and redemption of offers. It works although some areas less so than others.

  • don

    where did this guy get his numbers? Do the real math,this guy is trying to sell a bridge.

  • Melanie

    Works great for certain industries: landscapers, mechanics, home construction restaurant owners, etc. A lot of people who work from home have had success with this program. It’s cheaper than bulk mail, and you don’t need to purchase a list. You can target a prospect based on a demographic report fairly accurately as well; I was able to make a template on Excel that works great using a simple copy and paste method using the USPS EDDM tool. It’s a really great program for small businesses. Not perfect, but not expensive either – the printing expense listed above is out of this world. I can understand why Don is so mad, allowing himself to be tricked into paying so much! Next time call an EDDM specialist, we’ll get you a better price. For example: my 8.5″ x 7.5″ mailer costs the client 27 cents per piece at 5,000. That comes out to $1,350 – $800 of that is postage! That leaves $550 for production: the artist, print run, batching and delivery to the Post Office. I still turn a profit and my clients are very happy and so am I.

  • Scott

    If anyone needs printing, I can print 5,000 postcards 12″ x 6.5″ full color on both sides on 16pt (thick) stock EDDM approved for $650 shipped to your door. Good luck getting a better deal than that! E-Mail me at scott@advancedbusinesspromotions.com

  • momee

    When I place an ad in a local paper I am hoping for every door. But that doesn’t happen in the best possible way either. What about those that don’t get the paper? And the ones that do may not be interested in my product. Any advertising has the factor of having a ratio of what you put out there to what business is brought in.
    To me this is worth a try because I can target the area that I want to interest. My postcard looks fantastic and will get into peoples’ homes rather than never get seen in free newspapers or get lost in direct mailers that have several other businesses competing for attention on the same flyer. I am giving it a try. Maybe it will be worthwhile and maybe it won’t. But there a many other well touted methods that I have not found useful like free newspapers, Groupons, etc.

  • egark

    If all of that is true for you, then don’t use it. It’s just another option.

  • EDDM ROCKS

    Haha, hilarious “debate.” We switched to EDDM mailers last year and have made a 600% increase in memberships in less than 9 months. “Targeted mailers” were doing absolutely NOTHING for our business. So, good luck with your targeted mail, we’ll take our EDDM mailers ALL DAY LONG, it’s been a game changer!

    • http://twitter.com/obashadab Andrew

      What kind of company do you have, out of curiosity?

      The construction company I work for sent out 65,000 mailers and received 20 responses.

  • http://twitter.com/adjunky mark fleisher

    Good article. Just one aspect you did not mention. Timing. One of the biggest problems we have had in past years with bulk mailing is the timing. While we were able to mail to our own mailing list, we could not depend on the P.O. to deliver it on a consistent time frame. Sometimes they would deliver in a few days and other times they would deliver in two weeks. This was our biggest problem with direct mail. But EDDM seems to have solved that. Since we do all the sorting right down to the carrier level, we know when we deliver that tray to the P.O., it will be in the customers mail box the next day. This is a huge factor in direct mail campaigns, especially if you are doing a sale.

  • -A

    Great Article!

  • William Washington

    If anyone needs printing, I can print 5,000 postcards 12″ x 6.5″ full
    color on both sides on 16pt (thick) stock EDDM approved for $465 shipped
    to your door. Good luck getting a better deal than that! E-Mail me at William@WmWashington.com

  • s.smith

    I would like to see the analytic that shows a 2% ROI on 250 cards. That is unheard of. I buy EDDM print for about 1/3 of what this article claims. We have clients who expect to get about 10 new customers out of a mailing of 2,500 and are happy when they do. You want to write about what is “bad business”? How about $2000 a month for SEO!

  • john

    yes, i disagree with your eddm opinion – as always you’re just looking out for # 1 and in this case it happens to be your company ;-(

  • Rodg

    A very biased and misleading article.

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