Understanding your direct mail response rate is a crucial aspect of understanding the value of your direct mail marketing campaign.
A direct mail response rate is a measure that reflects the percentage of people who responded to your direct mail campaign. while a good direct mail response rate is a ratio that speaks to how many emails in an email marketing campaign actually make it to the recipient’s inbox. If 100 emails are sent and only 5 of them actually get delivered to an inbox and the rest get caught in spam filters, that illustrates a very low deliverability rate. many believe that deliverability rate is an even more important metric… read more can be objectively discovered, its value is highly subjective. You may receive a good or high response rate from your personalized direct mail marketing campaign, but the value of the campaign will be determined by your marketing goals and the purpose of the campaign, rather than just the responses.
There is a difference between a direct mail campaign that focuses on increasing sales and one that targets an audience to provide information and generate leads. reach out to them as a way to gain their trust and build a relationship until you turn them into a customer. Productive lead generation should result in increased brand awareness, new relationships, higher quality leads, and ultimately more sales. comp…read more. for example:
- If you are a company that provides solar energy solutions, you can start a solar direct mail campaign that is highly informative. your direct maildirect mail is the act of using the postal service to deliver promotional marketing material directly to a customer based on demographic information such as age, location, or income. direct mail pieces can include postcards, catalogs, and other promotional pieces allow one-on-one communication with your audience, so you can control who receives the message and when they receive it… read more the campaign sends an email that informs your target audience about the benefits of solar energy and offers a record for your audience to receive more information. a higher direct mail response rate would be valuable in this type of campaign that generates leads and provides information.
- If you are a mortgage provider and you instigate a mortgage direct mail that many of your recipients may not be ready to buy a home or need your services. the direct mail response rate may be low, but the profit from the few qualified buyers who took advantage of your services may be high.
average direct mail response rate
Although many companies are addressing digital transformation (the transition from manual practices to digital processes), direct mail marketing is far from dying as an old-school marketing practice. direct mail has an average response rate of 4.4 percent, compared to a 0.12 percent response rate for email. response rates for direct mail tend to be 10 to 30 times higher than digital mail, and 60 percent of recipients note that receiving and handling direct mail makes a longer-lasting mental impression that is easier to remember later.
studies on direct mail and how to use it more effectively please note:
- direct mail campaigns generate five times more purchases than email campaigns.
- direct mail stands out in a digital world and creates a unique physical experience for the customer.
- direct mail can also be more shared as it is likely to be seen by the whole household and usually has a shelf life of 17 days.
While an average response rate may be 4.4 percent, direct mail has lasting impacts that must be considered when evaluating your marketing campaign. additional direct mail statistics is the analysis of raw data to extract meaningful patterns or information. In the marketing world, analytics tell us a lot about consumer behaviors, which can affect how we market to those consumers. If analytics show that a consumer only eats healthy foods based on their shopping history and online searches, it’s probably not the best target for communication from… read more show that 42.2 percent of direct mail recipients read or They scan the mail they receive. Although you may not be increasing your response rate, you are gaining valuable impressions with your target audience. Additionally, 73 percent of US consumers say they prefer direct mail because they can read it at their leisure, which can’t always be calculated for a response rate.
direct mail campaign costs
To weigh the value of a direct mail marketing campaign, you can include response rate among other variables, including the total cost of the campaign. There are different types of direct mail commonly used; postcards, letters, newsletters and catalogues. each type of direct mail will cost differently for design, printing, and distribution.
If your business sends direct mail on a large scale for informational purposes, you might consider the difference between these two campaigns, where the goal is to send 5,000 pieces of direct mail.
campaign to: 5,000 informative postcards:
- cost per unit: $0.50
- total cost: $2,500
- response rate: 4.4%
- cost per response: $110
campaign b: 5,000 letters:
- cost per unit: $1
- total cost: $5,000
- response rate: 4.4%
- cost per response: $220
While this analysis focuses on cost per response, you may also want to consider a more meaningful analysis by exploring return on investment (roi) – what your business earns or what goals are achieved through your email campaign straight. Businesses should consider using different direct mail materials for different target audiences and campaigns, and adjust their mailing list to ensure their most expensive campaigns reach their specific target audience for the greatest return on investment.
return on direct mail marketing investment
A return on investment is a financial ratio that uses a formula to measure the gain, achievement, or profitability of an investment. Return on Investment (ROI) is simply the measure of what was spent on a marketing campaign compared to the sales that were a result of that marketing campaign. Simply put, for every dollar a company spends on marketing, how much money does that effort generate in sales? On a larger scale, ROI is a key metric used not only to determine the success of marketing efforts, but… read more the formula is as follows:
- roi = net return on investment (net return = profit – cost of investment) ÷ cost of investment × 100 percent
Using the ROI model in conjunction with direct mail response rate can give you an even deeper understanding of the value of your direct mail marketing campaign. In general, direct mail marketing statistics show that the average ROI of direct mail campaigns ranges from 18 to 20 percent.
Consider an automotive direct mail campaign for a car dealer:
- A car dealership spends $10,000 on a direct mail marketing campaign using catalogs that cost $1 per unit, to sell $15,000 worth of cars, amassing $5,000 in profit per vehicle sold.
- The campaign was able to send 10,000 catalogs but had a low direct mail response rate of only 0.1 percent (10 purchases).
- Those 10 purchases equal $150,000 in total sales for the dealer, resulting in a profit of $50,000.
- net profit for the dealer is $40,000 ($50,000 – $10,000).
- roi = $40,000 ÷ $110,000 × 100 percent
- roi = 36 percent
Although the direct mail response rate was extremely low at 0.1%, the return on investment was 36% (due in part to the high cost of the product) and the net profit from the direct mail campaign was of $40,000.
how to measure the effectiveness of direct mail marketing
Measuring the effectiveness of your direct mail marketing campaign can extend beyond calculating your direct mail response rate and your return on investment. You might also consider calculating your response quality – how many of your response rate made a purchase. o Set up tracking methods like a phone number, coupon code, or url to track the sales or leads generated by the campaign. To track the effectiveness of your direct mail marketing, you must first consider key performance indicators. Key Performance Indicators, or KPIs, are important measurements used to measure the effectiveness of a marketing campaign. For example, is the goal of a certain marketing campaign to convert leads? gain followers on social networks? get subscriptions to a newsletter? At the beginning of a marketing campaign, it’s important to determine what your barometers for success are, so that… read more (kpis) are used as metrics to discover how your campaign is performing.
Additional kpis and marketing metrics for a direct mail campaign may include:
- the conversion rate, also known as the order rate. conversion rate calculates the percentage of respondents who made a purchase after receiving your email.
- cost per acquisition (cpa). The CPA calculates the cost of each new lead, order, or purchase. you can compare your cpa for your direct mail campaign to other marketing campaigns to determine the most effective marketing solution and return on investment.
- average order size or revenue per order. you can calculate the average purchase or sale made or revenue from sales generated by your email.
- customer lifetime value. customer lifetime value will help you understand the cost of acquisition and retention.
Understanding your direct mail response rate is a crucial aspect of understanding the value of your direct mail marketing campaign. however, to truly understand the value of your direct marketing campaign, your direct mail response needs to be considered along with other qualifying marketing factors and indicators.