To calculate the break-even point of your creative direct mail campaigns, you must take into account the price of the product you are selling; the cost of goods, printing, and postage; the fee to rent a mailing list; and the fee to assemble the mailing, sort it, and bring it to the post office — an operation you can perform in-house or outsource to a letter shop. Once you gather this data, plug it into the free online calculator at www.dmresponsecalculator.com. This will help you determine the number of paid orders from your direct mail promotions and the response rate needed to break even.

Old-fashioned direct mail is hot again, but the “rules” have changed to meet changing consumer habits. To ensure success, you need to know what’s working and what’s not in direct mail marketing. Find out by downloading your free copy of The 5 Best Direct Mail Marketing Ideas of 2010 without cost or obligation.

The only ways to increase direct marketing ROI are to reduce the mailing cost of the direct mail offer, increase the response rate, or increase the size of the average order. There are many direct mail marketing tricks for doing each of these. Nutritional supplement marketers, for example, have found that they can increase average order size by offering customers three options: one bottle, three bottles, or six bottles. In such a case, the average order is a little more than three bottles.

Plug your costs and product price into the online calculator to calculate the response rate percentage needed to break even. If it’s 2 percent or lower, you have a shot at making your direct mail promotions work. On the other hand, if you need a 5 percent or higher response to break even, your price points are likely not high enough to sell your product through direct mail. Bottom line: It’s extremely difficult to profitably sell a mail order product that costs much less than $50.

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