Direct mail: what’s a good response rate?

July 29th, 2010 by Bob Bly

Most people, when discussing direct mail response rates, think in
terms of percentages.

For years, 2% was viewed as an “average” response rate.

The problem is that percentages don’t take into account things
like the cost of the mailing or the price of the product being
sold.

A much better measure of direct mail response rates is
“break-even.”

“Break even” means the sales generated by a mailing is equal to
the cost of the mailing.

For a mailing that generates 150% of break-even, you make $1.50
in sales for every $1 you spend on the mailing, including printing,
list, and postage.

Here is a free online calculator you can use. It calculates the
percentage response rate your mailing must achieve to reach break
even. That way, you know whether your 1% response rate is good,
fair, or terrible in terms of ROI.

The online response calculator is free ? there’s no cost to use
the calculator as often as you like:

www.dmresponsecalculator.com

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This entry was posted on Thursday, July 29th, 2010 at 1:45 pm and is filed under Direct Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

49 responses about “Direct mail: what’s a good response rate?”

  1. TC/Copywriter Underground said:

    Break-even analysis has proven a useful tool with my clients; it’s an excellent way to get an early warning about mail program costs.

    If you need a 4% response just to break even, you better have a hell of an offer – or look for ways to trim the cost of the program.

    That 2% number drives me crazy; most B2B hasn’t seen an average 2% response in a long time…

  2. Contact said:

    I mailed out 5000 and received one call. Fail

  3. Walt said:

    Even though direct mail and an e-mail campaign are different in many ways I think it is prudent to test your ad copy on an e-mail campaign or on a web site using an ad-words campaign. Direct mail is expensive but with good ad-copy and a good USP you can still generate a decent response. A marketers mantra should be “test, test, test.” And test a cheaply as possible. Walt Marsh Preaching With Power

  4. Monica said:

    I was trying to explain to my boss that the 1% call back rate and 2% response (people just showed up at the event w/o calling first) was not horrendous. The list was COLD! Dead cold! we had a 4% mail return rate & this list was never contacted before (or after). the copy was ok, but obviously not great, and everything had to be out the door in 3 days, with 2 days to spare for the people to receive the mailer.

  5. worldbiznews said:

    It’s very expensive to implement a direct mail to your business. All costs and efforts must be considered before doing it so. That’s the reason why most businesses don’t really go for direct mail as a form to boost their clients.

  6. Bob McCarthy said:

    I agree that break even is a good way to analyze your campaign – assuming the campaign is selling a product or service.

    But most direct mail is designed to generate a lead – not a sale – which means you need to factor in the conversion process.

    So if only one out of four leads convert to a sale (25%), your 2% response rate becomes a 0.5% order rate.

    Personally, I like to use a “cost-per” analysis – cost per response, cost per qualified lead, cost per order – which also allows you to account for the cost of the mailing.

  7. John Idaho said:

    If you generate $1,000 in sales from a $1,000 campaign expese selling 1,000 items that cost you 80 cents to produce, you haven’t broken even. You’ve lost $800.

    Break even would be cost-of-mailing equals profit, not revenue.

  8. Seattle Printers said:

    Great post. That’s True it is very important to measure your direct mail marketing efforts like response rates and ROI to get the best results, otherwise your efforts may go waste.

  9. Gary Taylor said:

    This is a recent infographic about direct mail response rates, pretty useful

    http://www.directmailfulfilment.org.uk/direct-mail-response-rates

    I ave seen other figures from Royal Mail too at around 11.5%

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    Direct mail what a good response mail… this is the best post i have read as i found it very subjective and informative enough… this can lead to high response rates

  19. Andy said:

    I agree – a much better measure of direct mail response rates is “break-even.”

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