What is the true cost of mailing letters to the homeowners in your community association?
Scott M. Davis is Operations Supervisor for Professional Community Management, Inc in Millersville, Maryland, and he found the answer.
PCM was facing the dilemma of whether or not to switch to using email over mail as the primary form of communications for their communities. Being a bit of a numbers geek himself, Scott ran the numbers. And because he's a nice guy, he agreed to share his results with the CAM Blog so you could benefit from them.
Scott evaluated the costs of First Class Mail versus the costs of Email - both as a profit center for PCM and also as a cost center for the communities they manage.
Assuming the TOPS iMail add-on for TOPS Professional and TOPS iQ, Scott calculated the costs of emails based on the silver plan (5,000 emails per month) and the gold plan (25,000 emails per month). Using these numbers*, Scott was able to determine the cost of emails to their management company.
(* For those of our readers not currently using TOPS, these numbers can be duplicated simply by inserting the cost of your chosen email blast program in place of TOPS iMail numbers.)
He then calculated a series of charge-back points for the community: from $.10/email to $.50/email, to see what those costs would look like on the community end. Finally, he compared the numbers to first class postage, for a single page letter (although remember that email can contain an unlimited number of pages for the same cost).
Actual Costs of a Single Letter vs Email
Take a single letter. To mail it, you need to calculate the cost of the paper (about $.001), copies (about $.070), envelopes (about $.011) and, of course, postage ($.485). So the cost of mailing a single page letter to a homeowner is about 58 cents. Assuming the management company charges the community a modest fee of $.75 per mail, it is a pretty small profit center for the management company, and none of the expenses above take equipment into account, which can be a major expense for high volume mailing.
With that same letter in email, assuming the highest plan to send bulk emails, the cost to send a single email to an owner is approximately 30 cents. Even if the management company charges the community $.50/email (instead of $.75/letter), both the management company and the community benefit - the management company with a higher profit margin, and the community with decreased costs.
Even at the Highest Level, Email is Cheaper for Everyone
Here are Scott's results:
"When it comes to first class mail, profit margin is fixed regardless of how many one page letters we mail. In other words, the equation is linear. However, when you evaluate email profitability, it changes depending on:
1) The cost of the plan to send mass emails each month
2) What we would charge per email, and
3) How many emails are actually sent.
Long story short, regardless of how you slice it, it is much, MUCH more profitable for us to send emails to our clients than it is to send first class mail.
Even if we charge $.50/email, we’d still be saving the association 35% in mailing costs. That’s max profit margin for us at a significant savings for the association."
Thank you Scott for sharing those results with us! For those of you who are numbers geeks too, Scott has generously shared his spreadsheet, which you can use to see the full details, or plug in your own costs and margins and see for yourself how much switching to email for your communications can save you!
*Image credit: Austin Kirk via flickr