The power of direct mail to elicit a response from the target audience has often been demonstrated on this blog. Examining your response rate, and the factors which influence it is crucial to an effective marketing campaign. In this article, we look at three key elements which are important to keep in mind when examining your response rate.
Thinking about the 2%
The 2% response rate for DMS is a statistic that is often thrown around but it’s important to consider context when looking at percentages like these. The 2% response rate is only an average and applies to direct mail sent to an outside list and advertising an offer which requires minimal commitment from the target audience. If you are mailing to an in-house list, your response rate should be significantly higher, around 3.7%.
On the flipside, the percentage drops significantly if you use a price offer rather than a free offer, as this requires the audience to purchase one of your products and price is a significant barrier to achieving a high response rate.
Response, conversion, and net order rate
Although response rates are important, they aren’t telling the whole story. At the end of the day, the conversion rate is really what matters and a lot of the direct mail marketing statistics out there fail to take conversion and net order into consideration. Although putting in a free service might superficially boost your response rate, it may not necessarily result in more customers and may actually cost your business in the long run. For this reason, it’s important to tailor your marketing (and the group you are marketing to) to ensure you get quality rather than quantity in terms of response, and look beyond response rate statistics when considering whether or not your campaign is effective.
Keeping cost per response in mind
Although direct mail marketing offers a strong return on marketing investment and typically has an ROI of 15-17%, it’s always important balance your response rate with your mailing costs. A high response rate is all well and good, but if it’s costing too much, your business isn’t going to grow.
Direct Mail Solutions specialise in direct mail marketing and are able to advise you on the best strategy to benefit your business.