Thinking about direct mailing

I was thinking about trying some direct mailing for some CPA offers and would like some expert opinions first.

First of all, what kind of offers do you suggest or have you had success with? I was thinking about doing some sort of auto insurance offer. I actually used to work at a printing company that can print and mail them at a discount for me. I was thinking about targeting low-mid 20's. I can get $16 for them filling out information for a free quote.

One of the things that worries me is the low conversion rate I have heard about from direct mailing. I have read in marketing books that say the average is 2%. I'm hoping that the fact that my offer is for a FREE quote, that I will be able to do better than that.

Here's what I estimate my costs to be for 1000 postcards:
-$150 for 1000 4x9 postcards (I go with the strange size to draw attention to it)
-$180 = .18 x $1000 for mailing (discounted for bulk mailing)
-$55 for mailing list (could possibly be lower if the company already has a database of my target audience)

Bringing me to a grand total of $385.

For me to break even with the car insurance quote, this requires me to get a conversion of 2.5%. If I get a 3.5% conversion rate, that's a 45% ROI and well worth my time to try it at larger volumes.


I understand that direct mailing isn't typically used for CPA offers, but based on these numbers, can anyone see this working? Maybe with a different offer and different targeted audience?

Any help is greatly appreciated.

-James