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'Cost Per Thousand' Isn't the Best Way to Approach Medicare Marketing

In the extremely competitive world of healthcare acquisition, many firms seek a reduction in the cost per thousand mailed.  In fact, if a procurement style of cost management is in place that is your KPI.

For many years, this approach was sufficient for success.

In today’s fragmented consumer marketplace, the focus must be on audience identification.  Who wants to buy our policy? 

Not every consumer over 65 years old wants to buy our specific product-Medicare Advantage or Dental etc.

The shift from Cost per M to Cost per Lead is often perplexing due to the increase in cost for the audience/mailing list.   It seems illogical to spend more per thousand.  However, it is required. 

Standard demographic mailing:

List                                          $20.00/M                            

Total mail cost                    $350.00/M

Response rate                     .006                                                                                                   

Cost per lead=$58.33 (350/6)                                       

But if I raise the cost of the mailing list to $70.00/M or $50.00/M higher and get a response rate of 2.0 percent what is the outcome?

Propensity based mailing:

List                                          $70.00/M

Total mail cost                   $400.00/M

Response rate                     .02

Cost per lead                       $20.00 each (400/20)      

The client that I mentioned reduced their mail volume by 3 million pieces and saved over a million dollars annually.   By switching their KPI.

If your organization has put procurement in charge of your marketing expenses then I recommend you stop and review their decisions. 

Efficient targeting is the key to lower cost per acquisition as opposed to lowest cost per thousand mailed.


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Mike Hail
Mike Hail
Mike Hail serves as CEO of Data Decisions Group. Previously, he has been CEO, Web Decisions Group, CEO, Yankelovich, CEO, Knowledgebase Marketing. With 41 years of marketing experience on both sides of the desk, Mike acts as the professional listener and interpreter for our client engagements. He focuses on the data and analytical aspects of our solutions.