Direct Mail: Know the Response
There are many times when customers reach out to us to help them increase response rates. When that happens, my first question to them is “What was the response rate on your last mailing?” Now you would think that after 24 years in the business the standard response to this question would no longer shock me — however, that is not the case. When I hear “I am not sure,” I cringe. In 2015, how can you not know what your response rate was? You need this information. How can you execute a marketing plan without knowing your numbers?
So, let’s take a look at what the DMA 2015 Response Rate Report found:
- The average response rate is 3.7%
- The average cost per response is $19 which when compared to other channels is very competitive
- Best performing style by category is an oversized envelope at 5%
- The next best performing style by category is a postcard at 4.25%
- The most expensive category to mail are dimensional pieces at $30 per response
- The next most expensive are catalogs at $23 per response
- The most common way to track direct mail response is online at 22%
- The next most common way is through a call center at 19%
How do your numbers compare? One key takeaway is that direct mail response rates are higher than all digital media in the study. Direct mail can benefit your marketing mix, but you need to know your numbers so you can keep doing what works, and fix what doesn’t. One other note: most marketers now use more than one channel in order to fulfill campaign objectives. The study found that in most cases marketers were using three or more channels. When they were, the channels used most often together were direct mail, email and social media.
There is no way to predict exactly how well your direct mail campaign will perform, but knowing what the direct mail averages are helps. You need to know your average in order to set a baseline. From there you can work on making changes that could enhance your response. The three core components to focus on with direct mail are the list, design and offer. Keep in mind that when you create offers, free things are a better driver than a discount. This does not mean that you have to give your product or service away, you can give away a generic item such as a gift card for coffee.
When you decide to make changes — no matter what those changes are — keep a group of people separate from the change group. They will be your control group. You will use the control group results to compare with the changed group results to see which had a better response rate. You can test this may different times or further segment your list with a different change on each segment other than your control segment all at one time.
When you know your numbers, you are able to predict your results with more accuracy and continue to improve the quality of the direct mail you are sending out. When you are able to send the right offers to the right people by knowing your results, you decrease your cost per acquisition and increase your ROI. When you are just starting out, you can track your numbers in an excel spreadsheet. This will allow you to compare numbers from past campaigns as well as plan for the next one.
A blog about Direct Mail Marketing, tips, tricks and what not to do.
Summer Gould is President of Eye/Comm Inc. Summer has spent her 23 year career helping clients achieve better marketing results. She has served as a panel speaker for the Association of Marketing Service Providers conferences. She is active in several industry organizations and she is a board member for Printing Industries Association San Diego, as well as a board member for Mailing Systems Management Association of San Diego. She is also a committee member for Visionaries in Philanthropy which benefits San Diego Meals on Wheels.