I think it really depends on your market (are you targeting people who still read the mail before they chuck it out, i.e. older people?) and what sort of material would it be going in (is it in a free magazine aimed at families who would be looking for party cakes? Or to people with an interest in baking? Or with other information on catering services marketed to local companies? Etc.). We also own a small business, but I don't think we'd do direct mail marketing. I think it's a bit outdated. I know I throw all that stuff right in the bin without ever looking at it myself! There are so many free/low cost or more effective ways we've found of marketing. Facebook is great and we've had a lot of successful through our Facebook page - clients can post photos and tag your company in it or they send us photos to post. Encouraging this with clients is a great way to reach other to your broader networks. We obviously also have a website, which is good for ordering and contacting us, but I don't think it's as useful for marketing as Facebook. Posting on Facebook groups helps too and we do some of that, directing people to our Facebook page and website.
We've also found that doing events has been a great way to market ourselves. So we do a lot of summer festivals and fairs where we have a table. It's a way to sell small or already made items, but also gives you a public space where people can find out about your business and speak to you about custom orders. So in your case, would there be local food festivals or holiday fairs where you could hire a table, sell some cupcakes or individual servings of cakes, and then have your cards available and someone who can speak to folks who might have an interest in putting in an order for a custom cake? We've gotten a lot of business this way. A lot of our winter work is custom orders that we get through doing festivals in the summer and that tides us over every year.
We did put an ad in a local free magazine (it's the sort of thing you can pick up at a local shop) for a 2 year run. That was probably almost 2 years ago now and I don't think we've gotten a single enquiry because of that. I imagine that would be the sort of thing that is akin to direct mail marketing. I honestly don't think people really look at that stuff anymore, or at least not relative to how much it costs to do that sort of marketing, when you can do other things for free or nearly free (50 bucks for a table at a weekend event).
Honestly, I'd be inclined to go the festival and fair route or paid for a Facebook ad or something over direct mail, maybe Groupon if you have that locally?
