Thinking of diving into direct mail marketing, but unsure of what to expect in terms of response rates response rates?
You aren’t alone. It’s a common question that marketers are asking as they are investigating whether or not to add direct mail to their mix.
You need good data to help set goals and to judge the effectiveness of your campaigns.
Measuring Direct Mail Response
Time needed: 30 minutes.
How do you calculate the response rate for direct mail? It is pretty straightforward:
- Add up all of your responses
Gather data from your online tracking and/or offline tracking tools
- Add up all of the recipients that were mailed to
Your direct mail service provider should give you a dashboard with this information for easy access
- Divide the total responses to your mailing (not the sales, that’s a separate calculation) by the total mailpieces sent
300 Responses/10,000 mailpieces = 3% Response Rate
Learn how marketers are deploying Personalized URLs in direct mail automation tools to manage online response tracking for their campaigns.
Average Response Rates – According To The Numbers
The DMA (Data Marketing & Analytics) does an annual survey of marketing response rates that many marketers use for benchmarking. The respondents are typically marketers at large organizations that send a lot of direct mail. As you can see, they break down their responses by list type.
A “House List” is a list of current customers or leads that have expressed interest in your products or services. As you can see, they’ll respond at high rates. The DMA survey had the average at a bit over 5% in 2016.
A “Prospect List” is a cold list, with no association or stated desire to hear from you or your brand. These cold campaigns are a common use of direct mail, as it is an efficient way to drum up new leads. You can see that the 2016 survey had the average response rate at 2.9%.
What’s interesting is that direct mail response rates appear to be rising. Both House and Prospect List figures represent dramatic jumps from the 2010 survey results.
Why? We think there are a variety of factors, including lower overall mail volume (each piece stands out more), better mail tech & personalization techniques. Here’s why we built Postalytics to help accelerate this trend.
Response Rate Factors & Considerations
Response rates differ between campaigns, with many factors at play.
Having a complete understanding of your campaign and the variables that impact the response rate will help you to set expectations and better estimate the types of returns you can expect from your campaign.
How Targeted is Your List?
If you sent an offer for beauty supplies to a bunch of teenage boys, what kind of response rate would you expect to receive? Probably not very high. The makeup of your list is the most important factor when it comes to determining expected response rates.
A more targeted list will be more interested in your offer and therefore respond to the offer more often. If your list isn’t targeted, you’re going to fall below the average response rates that we outline in this article.
While your goal should always be to send your offers to as targeted of a list as possible, campaigns that are able to generate a reliable return from less-targeted lists are still viable campaigns and have a lot of room for optimization and improvement.
How Aware is Your Audience?
How aware of your company and products is the audience? Have they interacted with your company before? Have they received marketing materials from you in the past?
If the audience has never had any exposure to your company or products, you can expect a lower response rate than you would from campaigns where the person is already dialed into your offering or has expressed some interest in the past (see the “Prospect List” vs “House List” stats above).
Want to learn more about how direct mailing lists are compiled and sold? Check out the Postalytics ultimate guide to direct mailing list selection and testing.
What Kind of Offer are You Sending?
The strength of your offer, for the audience you are mailing to, is a critical piece of the response rate puzzle.
Your offer must be clear. It must be easily found when your mailpiece is scanned. Your audience will first scan your mailpiece, THEN read it if they’re interested.
The easier and less commitment involved in acting on your offer, the higher the response rate will be.
Free. Money back guarantee. No-Risk. All of these phrases remove fear from taking action.
What Type of Mailpiece Format Are You Sending?
Of course, a higher quality piece will cost more to send, so there is a tradeoff there. If you’d like to learn more about the cost of direct mail, please refer to our recent blog post.
A study from DMA tested response rates for several different types of collateral:
Will There Be Multiple Touch Points? How About Multiple Channels?
Multi-touch campaigns get better response than single touch campaigns. Multi-channel marketing works better than single channel marketing.
Evaluating the success at each touchpoint is important for optimization, but multiple touch direct mail campaigns are typically more successful for a reason — because many prospects will need more convincing than a single mailer can facilitate.
Think about it. What would you think of a sales rep that makes a single call, leaves a message, and never calls back? That’s what sending a single mailer out, especially to a cold audience (or Prospect List), is like.
What Industry Are You In?
Different industries convert at different rates. The demographics of most direct mail audiences tend to skew a bit older than digital channels, and with that see higher response rates that better align with the audience.
What Response Rate Can I Get?
If you’re just starting out with direct mail, as with any other channel, you probably won’t meet or beat the response rates of the pros that participate in the DMA survey. You can get there with some time, testing and learning.
Because of all of the reasons that are listed above, there really is no “average response rate” without factoring in those issues. A general guideline for a cold or prospect list that we give our customers is a response rate of 2%. This assumes that:
- Your creative is well designed, written and has a clear and strong call to action, and
- Your offer does not require a lot on the part of the recipient. In other words — it should be easy for them to respond. This also means that the action that you are asking them to take should be free.
Free offers play a huge role in any lead generation campaign. If you are directly asking for a sale, you can expect response rates much lower than 2%. Of course, these campaigns can still generate a substantial ROI even with response rates lower than 2%, but it is important that you are able to identify a response rate that you need to hit for the campaign to remain profitable.
Response Rate is Useless Without Gauging Response Quality
Having a high response rate isn’t all that useful if you are generating low-quality responses.
The response rate only tells you how many people responded, not what they responded with. You have to look at your back end conversions that come from the responses to determine the quality of those responses.
Your entire list could respond, but if none of them are turning into paying customers than your response rate isn’t telling you much about the success of your campaign.
Tracking is Key
Like any marketing activity, lifting response rates requires that you learn from previous campaigns.
To do that, you’ll need built-in tracking to evaluate true response rates and optimize future campaigns.
Postalytics can help. Our solution integrates with popular marketing and sales platforms like HubSpot, Salesforce, ActiveCampaign, and InfusionSoft, allowing you to keep a close eye on multi-channel campaigns while optimizing your direct mail offers.