Neighbourhood Mail vs. Postal Code Targeting: What’s the Difference?

Want to create a direct mail campaign that converts but not sure which type is best for your business? Two of the most common types of direct mail include neighbourhood mail and postal code targeting. But what’s the difference between neighbourhood mail vs. postal code targeting?

Our direct mail specialists will explain the differences between neighbourhood mail vs. postal code targeting. Plus, we’ll examine how to target the neighbours of your best customers with the help of postal code targeting and discuss the advantages that offers. For example, targeting the direct neighbours of your current customers allows you to reach like-minded people. In addition, by targeting neighbours, you can promote positive word of mouth – because we all know neighbours talk about their experiences with products and services!

Before we dive in, here are some features that distinguish neighbourhood mail vs. postal code targeting.

*Minimum order size is dependent. See below for more information.

**Tracking capabilities are based on 3rd party tools, including Call Tracking and QR Codes.

When should I use Neighbourhood Mail vs. Postal Code Targeting?

This is a complex question because there are many reasons to use each type of direct mail. In fact, if, at some point, you are targeting a lot of postal codes with PCT, you should probably send out NM to save money!

To help make this less cryptic, here are some specific scenarios in which you would want to use Neighbourhood Mail vs. Postal Code Targeting.

Use Neighbourhood Mail If:

• You want to hit as many people as possible for the best price.
• Your audience is clustered in a tightly packed area.
• You want to increase brand awareness and reach new people.
• You do not have customer data to utilize.
• You are a new business.
• Your audience is broadly defined.

Use Postal Code Targeting If:

• You have good data to utilize.
• Your potential customers likely live nearby your existing customers.
• Your audience is scattered across a large geographic area, and you don’t want to hit everyone.
• You don’t want your current customers to receive the mail.
• Your campaign is timely and needs to be delivered quickly.

Still not sure which type of mail to send out? Our team can help. Call us to discuss your campaign goals, and we’ll help you create the best strategy to achieve them!

What is a Canadian postal code?

First things first – let’s take a look at what a Canadian postal code is and how it works. Why is this important? Well, it will help you better understand the differences in targeting capabilities between neighbourhood mail vs. postal code targeting campaigns. This information will also show just how powerful it is to be able to target a 6-digit postal code.

So, what is a postal code? A Canadian postal code is a 6-digit number that specifies a particular neighbourhood. The first three digits of a postal code are referred to as the FSA (Forward Sortation Area) code. You’ll find more information about 3-digit FSA codes below.

In an urban area, a 6-digit Canadian postal code is a collection of 15 to 25 single-family houses (on average). Apartment buildings (or blocks) often have their own postal code assigned. Thus, in the case of an apartment building, a postal code could have 100s of households in it.

In rural areas, things are a bit different. A rural 6-digit postal code can cover hundreds of square kilometres. 

Below is a map of a sample area for a 6-digit rural postal code. In this case, all the households in this area would be included in a Postal Code Targeting (PCT) direct mail campaign.

Canadian postal codes are extremely valuable for marketing because, as data shows, like-minded people tend to live in the same area. In other words, people that live in the same postal code have similar lifestyles. In fact, Prizm Data from Environics has been able to gather data and pinpoint 67 unique lifestyle types that define neighbourhoods throughout Canada.

What is a 3-digit postal code?

As mentioned above, the first three digits of a Canadian postal code are known as the Forward Sortation Area or FSA. This area contains tens of thousands of households.

Now, digital marketing lets you target by postal code. However, digital campaigns can only target at the 3-digital level! In other words, digital campaigns only allow marketers to target an area as granular as 10,000+ households. As you can imagine, this capability is vastly inferior to being able to target 15 to 25 homes.

Now, let’s take a closer look at neighbourhood mail vs. postal code targeting campaigns.

What is Neighbourhood Mail?

Neighbourhood mail, often abbreviated to NM in the direct mail industry, is Unaddressed Mail.

This type of direct mail is ideal for lead generation and fostering brand awareness. In addition, NM is effective for advertising current promotions or events, promoting new products and services, and encouraging customer loyalty and word-of-mouth referrals. For example, new businesses can use neighbourhood mail to promote a grand opening.

Using Neighbourhood Mail, you can target nearly any address in Canada! That’s because this service has protected access to every building. On the other hand, mail services like local mail and newspaper distributors cannot enter certain locations, including apartments with bulk mail rooms.

What is a Neighbourhood Walk?

Sometimes called a “Letter Carrier Route”, this is the delivery area that a Letter Carrier/Canada Post Delivery Employee delivers mail to each day. When sending a Neighbourhood Mail campaign, you can select the Neighbourhood Walks you want your direct mail campaign to be delivered to.

Most Neighbourhood Walks contain 300 to 500 households. However, some high-density, urban areas may contain more homes.

You can deliver your NM campaign to a partial Letter Carrier Route. However, you will not be able to control which of the households receive your mail piece and which do not. In this case, it’s a luck-of-the-draw situation.

Not sure which neighbourhoods your business should be targeting? A Canada Post expert partner like One To One Mailing can help you identify the right neighbourhoods. 

What can I send with Neighbourhood Mail?

With Neighbourhood Mail, you can send postcards, envelopes, etc., as well as oversized items.

A Standard Neighbourhood Mail piece can be up to 12” x 6” x 1” (length x width x thickness) and 500 grams. Oversized Neighbourhood Mail pieces can be even larger, with a maximum size of 12” x 11” x 1” (length x width x thickness) and 500 grams. Oversized neighbourhood mail costs just $0.01 more!

Neighbourhood Mail Minimum Quantity

According to the 2024 Canada Post Neighbourhood Mail customer guide, when preparing your own direct mail campaign, the minimum quantity is “1 Neighborhood Walk”. While a typical Neighbourhood Walk is 300 – 500 homes, there are smaller ones across the country with less than 100!

When you work with a Canadian-based mailhouse like One To One Mailing or PostNow, you can send as few as 100 postcards with a Neighbourhood Mail campaign. We know the tricks to get it done.

Neighbourhood Mail Targeting Potential

Using Neighbourhood Mail, you can target a “neighbourhood walk.” In other words, all the homes within the area that a given postal worker delivers to in a single day.

What if you don’t want your mail delivered to every home in a neighbourhood walk? Fortunately, you can target less than a full neighbourhood walk. However, you cannot guarantee which homes in the area will get your mail pieces. Thus, this is not a great option for repeat marketing efforts.

Canada Post’s targeting tool for NM is called Precision Targeter. Using this tool, you can:

• Choose a geographic region.
• Combine up to 3 different demographic filters/options. For example, age, race, households with children, etc.
• Select options in each demographic filter category.
• Get information about which neighbourhood walks match your selected demographic targets. These neighbourhood walks are presented as a ranked list of all the walks in the geographic area you want to target. That is, the neighbourhood walks that most closely match your filters will be ranked higher (i.e. have a higher “match rate”). It is important to note that match rates can be difficult to understand. For instance, a good match rate cannot be broadly defined. Instead, what makes a good match rate depends on the campaign area and the applied demographic filters.

Cost of Neighbourhood Mail Postage Rate

The postage rate for a standard piece of neighbourhood mail for 2024 is $0.192 per household, up from the $0.184 rate in 2024. Upgrading this to an oversized mail piece will cost just $0.01 extra.

Companies that send over $10,000 in postage/year are eligible for significant cost savings with Neighbourhood Mail contract rates. If you are looking to establish a contract rate with Canada Post, our team can connect you with the right people! Give us a call today to get started – 1-866-482-2412.

Pros of Neighbourhood Mail

Neighbourhood Mail campaigns have many benefits. The most significant advantages of NM include:

• Affordable postage rates – Neighbourhood mail offers the most affordable postage rates. On average, a mail piece costs $0.192. However, you can see significant discounts if you are on a contract. For example, high-volume senders with $10,000 in postage spend are eligible for discounts on NM.
• Brand awareness – NM is an excellent tool for boosting brand awareness.
• New sales/customers – Neighbourhood mail can help you drive new sales and earn new customers.
• Low printing costs – NM is the cheapest mail type to print (because no addressing or dynamic content is needed).

Cons of Neighbourhood Mail

Like anything, in addition to numerous benefits, neighbourhood mail also has some disadvantages. For example:

• Lower engagement rate – when comparing neighbourhood mail vs. postal code targeting mail vs. personalized mail (PM), NM has a much lower engagement rate. This is because neighbourhood mail is not addressed or personalized.
• Required repetition – NM requires numerous campaigns to get the best results. But really, all marketing does.
• Slower delivery – again, when you compare neighbourhood mail vs. postal code targeting and personalized mail, NM is the slowest method of reaching customers. Typical delivery standards are 5 – 12 days, depending on the induction location vs. final delivery locations.

Now that you have a better idea of what Neighbourhood Mail is and how it works, let’s take a closer look at Postal Code Targeting.

What is Postal Code Targeting (PCT) direct mail?

Postal Code Targeting direct mail, abbreviated to PCT, is a type of hybrid mail. Essentially, it is Addressed Mail but without a name. It allows you to take your existing customer data (i.e. customer addresses) and use the postal codes to target the exact neighbours of your current customers!

Postal Code Targeting originated in the UK. PCT arrived in Canada when Canada Post invested in the UK’s technology so that they could manage these types of mail campaigns and data. This type of direct mail is very unique. In fact, only a few countries worldwide have access to such granular targeting. Not even the USA has this capability!

On top of incredibly precise targeting potential, PCT also has the shortest delivery times of any direct mail campaign type. Canada Post’s delivery standards for PCT are 3 – 5 days. However, at PostNow, we have seen Postal Code Targeting campaigns delivered in less than 24hrs from induction (i.e. delivery from Edmonton to Edmonton).

Did you know – PostNow can help you create and deliver a successful Postal Code Targeting direct mail campaign?

Here are some benefits of using PostNow to create a PCT campaign.

• PostNow is the only tool in Canada that allows you to build an audience in real-time using your postal codes. This will save you hours (or days) of going back and forth with a mail house!
• Since PostNow allows you to build your own audience, we can do smaller campaigns for a lower price.

PCT Targeting Potential

The targeting capabilities of neighbourhood mail vs. postal code targeting differ substantially. Using Postal Code Targeting, you can target a much smaller and more specific target market. That’s because PCT allows you to target distinct 6-digit postal codes.

As discussed above, a 6-digit postal code contains approximately 15 to 25 homes or an individual condo or apartment building.

Since condo and apartment buildings have their own unique postal codes, you can cherry-pick the specific residential buildings you want to target. This option is perfect for real estate agents, local businesses, and other industries that value the ability to target precise buildings.

Due to its more granular targeting potential, PCT is often preferred over neighbourhood mail for smaller and more precise campaigns.

Cost of Postal Code Targeting Postage Rate

The postage rate for a piece of Postal Code Targeting mail is $0.40 per household. Keep in mind that this includes data costs!

When compared to Personalized Mail and the “name and address” data that is available for purchase, this is almost 50% of the cost. As a result, PCT is a smart way to add personalization without incurring significant fees.

Pros of PCT Direct Mail

Like Neighbourhood Mail, Postal Code Targeting direct mail has numerous advantages. The benefits of PCT include:

• Speed – Postal Code Targeting mail is extremely fast! That’s because the mail pieces in a PCT campaign travel as 1st class mail. As a result, most campaigns are delivered in 3 to 4 days. However, at PostNow, we regularly see campaigns delivered as quickly as 24 hours. For example, most campaigns that are inducted in Edmonton and delivered to Edmonton arrive in 24 hours.
• No data costs – amazingly, there is no added cost to utilize Canada Post’s detailed data! The postage rate for PCT campaigns includes delivery and data, making this type of direct mail a very smart option.
• Higher open/engagement rates – PCT campaigns offer much higher engagement rates when comparing neighbourhood mail vs. postal code targeting. This is because Postal Code Targeting campaigns are much more targeted than Neighbourhood Mail campaigns. As a result, PCT for small businesses is highly efficient and effective.
• Cheaper than Personalized Mail – another key benefit of PCT is that it is more cost-effective than PM while still being addressed (unlike Neighourhood Mail).
• Semi-personalizable. Since you are sending to specific address clusters, you can add dynamic print to your campaigns. This means that you can customize text or imagery for each postal code, creating semi-personalized mail.

Cons of PCT Direct Mail

Before choosing which type of direct mail is right for your business, consider these disadvantages of Postal Code Targeting.

• Higher delivery costs – when considering neighbourhood mail vs. postal code targeting, it’s important to note that PCT is 2x the delivery cost.
• Higher printing costs – printing costs are also higher since Postal Code Targeting mail requires address spraying. However, as volumes increase, this becomes less of an issue.
• No names. When compared to Personalized Mail (which includes names), PCT often has lower engagement rates. However, the engagement rates for Postal Code Targeting direct mail are still significantly better than NM.

Neighbourhood Mail vs. Postal Code Targeting – How are they different?

Do neighbourhood mail and postal code targeting direct mail sound like the same thing? If you think so, you’re not alone – this is a common misconception. In fact, for a long time, people thought of Neighbourhood Mail as Postal Code Targeting because of Canada Post’s Precision Targeter tool and how it works. Digital ad channels also added to the confusion by blurring FSAs with Postal Codes. By doing so, these channels made it difficult for people to understand how small a 6-digit Postal Code target area actually is.

That said, there are some significant differences between Neighbourhood Mail vs. Postal Code Targeting. Two of the biggest differences include cost and the specificity of the target area. Neighbourhood Mail is cheaper than Postal Code Targeting direct mail. However, with PCT, you can be much more specific in who you target. This means better open and response rates!

Check out the chart above to learn more about the similarities and differences between Neighbourhood Mail vs. Postal Code Targeting.

So, now that you know more about these types of direct mail, which should you use for your business? Let’s take a look.

Send Out a Successful Direct Mail Campaign with the Help of PostNow & Canada Post

If you want to target your ideal customers and get results, direct mail is a great way to do it! And with the help of PostNow and Canada Post, you can create and deliver the perfect campaign. But how can these organizations help?

PostNow vs Canada Post

You might be wondering – what’s the difference between PostNow and Canada Post? Are they the same thing? The answer is – NO. PostNow is not Canada Post.

If you want to create a direct mail campaign, you cannot work directly with Canada Post to get it completed. Instead, you will need to work with a mail house – like PostNow.

Canada Post has numerous Expert Smartmail Partners across Canada, including PostNow. These mail houses are trusted by Canada Post to help businesses print and design direct mail campaigns.

Where does Canada Post fit in?

So then, what role does Canada Post play? Well, Canada Post is essentially the broadcast channel. They do not print, design or help with the targeting for your campaign. Instead, they just take your completed campaign and deliver it to the areas you specify.

Thus, to ensure that you have the experience and expertise necessary to create a mail campaign that converts, you will need to work with a mail house/Canada Post Expert Partner like PostNow.

Ready to start building a successful direct mail campaign? PostNow can help. Call us today to get started!