The Disadvantages of Direct Mail Advertising

Direct mail is the most common form of direct marketing. It is an approach to advertising where you send letters or postcards to customers with product information, persuasive messages about your brand or promotional discounts. While direct mail often is an affordable way for local businesses to communicate, it does have disadvantages relative to other marketing communication approaches.

You can control the total cost of a direct mail campaign by choosing how many mail pieces to produce and mail. However, the cost per contact of direct mail is 15 to 20 times more than it is through television and newspaper, according to the 2011 edition of "Promo," published by Cengage Learning. Design an effective piece, paying for printing and mail costs add up.

While technology has improved efficiency in mailing addresses, some contact lists are still full of address errors. Wrong street numbers or names and mismatched city, state and zip codes are issues. These faulty addresses occur because your store employees don't correctly gather and input details or you buy mailing lists from third parties that aren't thoroughly checked. Every mislabeled mailer is wasted expense, since it won't reach the intended target.

Since direct mail pieces often include information on limited promotions and time-sensitive coupons, you want them to get to customers at the right time. However, bulk mail and third-class mail delivery dates are hard to predict. Even a day or two delay in receipt by target customers can significantly lower your response rate and the effectiveness of a direct mail campaign.

Response rates on direct mail vary, but Gaebler.com, a website for entrepreneurs and small-business owners indicates that a normal response is 1 to 3 percent. Even a 1 percent response on big ticket items may make the mailing worthwhile. Targeting specific prospects or existing customers typically leads to a return closer to 3 percent. Still, paying $1 or more to produce and send a direct mail letter or postcard to customers, when 97 to 99 percent likely won't respond or buy means a lot of waste.