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:
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.
July 30th, 2010 at 4:44 pm
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…
August 1st, 2010 at 3:35 pm
I mailed out 5000 and received one call. Fail
August 2nd, 2010 at 2:29 pm
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
August 2nd, 2010 at 5:35 pm
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.
August 8th, 2010 at 7:24 am
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.
August 9th, 2010 at 11:48 am
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.
November 9th, 2010 at 5:57 pm
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.
November 16th, 2010 at 4:29 am
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.
February 18th, 2011 at 12:26 pm
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%
August 30th, 2011 at 7:40 am
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I agree – a much better measure of direct mail response rates is “break-even.”
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The response rate is the simplest, most common form of measuring the results of a direct mail program. The response rate reflects the percentage of people who respond to a mailing. To determine your response rate, you simply count up the number of responses the mailing generates, then divide by the quantity mailed.
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