Mailing List Brokers Buyer's Guide

Mailing list pricing

Standard compiled mailing list pricing is based on a cost per thousand impressions (CPM). The typical order is a 5,000 to 10,000-name minimum with a CPM of $100 (10 cents per name) for consumer records and $160 to $300 (16-30 cents per name) for business records. In most cases, mailing list brokers enforce a minimum charge of $500, regardless of the size of the list.

For response e-mail lists, the typical order size is 3,000-5,000 names. The average cost for consumer e-mail lists is a CPM of $250-$350. The CPM for a business list is $300-500. An "expired" list may be cheap to buy, but may cost your company more in the long run with poor response rates. On the other hand, a pricey list doesn't guarantee a higher response - remember, the most important goal in direct marketing is maximizing the response! Do a thorough review of mailing list details before choosing any one.

Direct mail is the most commonly recognized form of business-to-business and business-to-consumer correspondence - everyone gets mail. However, direct mail is also the costliest option. In addition to the list you rent, you have to factor in costs for designing and printing the mailing materials, postage, mail house fees to prepare and send the mailing, and fulfillment. Consider these total costs before renting a mailing list.

Before you even rent a mailing list, you need to determine how much you can budget for the entire mailing to determine what your "break-even point" is. For the average order of 5,000 pieces, expect to pay about $2,000 to $4,000 for the list, design, postage, mailing, and fulfillment.

E-mail has fewer additional costs, but there are still some. The primary expense is in the of your mailing. Plan on spending about $500 to $2,000 for an e-mail campaign, depending on what e-mail marketing services - e-mail management, tracking, and fulfillment - you need in addition to the list.

Mailing list success rates

It's hard to gauge just how successful a mailing list can be. For a direct mail list of 5,000 names, getting 50 to 150 responses (1% - 3%) would be considered a solid performance. For e-mail average success rates are considerably lower - 0.25% is common, and 1% can be considered a roaring success.

However, you should understand that there are no guarantees about the amount of business you can generate. Individual success will vary and will depend on the quality of the list, the tools and services that list brokers provide, and the effectiveness of your marketing efforts.

Understand too, that marketing in cyberspace is a completely different world with its own set of rules. Where mail has a fighting chance of getting open, emails may not even make it to a person's inbox. In 2005, MX Logic, an e-mail defense solutions company, reported that 77 percent of all e-mail traffic in 2004 (3 of 4 e-mail messages) was spam! This makes many consumers and businesses leery of e-mail marketing offers, even if they opt-in to receive offers.

You may also want to reach your prospects by e-mail through a follow-up direct mail campaign. Since e-mail costs less, it works well as a filtering mechanism to measure interest in your product or service for a more aggressive direct mail effort. If initial results are positive, you can then follow up with a direct mail campaign and help boost overall response rates.

Determining your Return on Investment (ROI)
Mailing list for direct mail	Mailing list for E-mail
5,000-name mailing list with 5 select categories - $500	5,000-unit E-mail list with 3 select categories - $300
Development of mailing deliverables, mail house services and fulfillment - $2,500	E-mail designed and sent to customers, tracking data - $500
Net costs - $3,000 Response rate - 1% (50 new customers)	Net costs - $800 Response rate - 0.2% (10 new customers)
Avg. new purchase - $75	Avg. new purchase - $110
Mailing list campaign resulted in a 25% ROI ($750 Net Revenue / $3,000 cost)	E-mail list campaign resulted in a 37.5% ROI ($300 Net Revenue / $800 cost)