To judge the effectiveness of your marketing campaigns, you need to look at your average direct mail response rate.
Direct mail response is everything that matters. Numbers don’t lie. Regardless of how much time, effort, and money may go into a campaign, if it doesn’t produce the results you expect or need, then go back to the drawing board.
Direct mail shows a 37 percent higher response rate than email, according to the Association of National Advertisers (ANA).
Pretty outstanding, right? But keep in mind that the rate is only an average across all direct mail verticals. Response rates vary higher or lower depending on many factors, such as industry, geographic location, and audience, to name just a few. We’ll get into that shortly (below).You should also focus on other direct mail campaign measurements, such as:
- Campaign Costs
- Costs Per Piece
- Conversion Rate
- Return On Investment (ROI)
Depending on your campaign strategy, budget, or other considerations, your response rate is not always the best way to indicate if a mailing succeeds or fails.
How is Response Rate Measured?
Determining the response rate for your campaign is a big step towards understanding if it is a success, and how. To calculate average direct mail response rate, divide the total count of responses by the number of pieces mailed, then multiply by 100.
So how does response get from the customer to you? Most often – but not always – it comes through the response touchpoints you include on your direct mail piece. You should know what response channels provide value, and how much, because it may not be as obvious as it seems at first glance.
Several approaches can help you measure the direct mail response performance of your campaign:
- Unique Offer Codes – Also known as coupon codes, they help match a transaction with a discount, personal identifier, or other data on a list
- Promotional URLs – Instead of your homepage, direct consumers to a unique landing page (or redirect using UTM parameters)
- PURLs – Personalized URLs let you leverage a customer’s personal name or other identifier to grab their attention
- QR Codes – The prospect scans the code on their mobile device,which opens a unique promotional URL, or UTM, or PURL
- Phone Numbers – An old school method using a unique number that’s registered by tracking software or manually by a staff member
- Direct Mail – Another old school method, this quantifies response when a bar code is scanned on a reply form or business reply mail or by manual processing
- In-Person – A visit to a retail or brick-and-mortar location results in scanning a bar code or entering a coupon code
What is an Average Direct Mail Response Rate?
Marketers who were surveyed by the ANA for its Response Report said that the average direct mail response rate was 9%. That’s for house lists, for customers you already have data on. For prospect lists, the figure isn’t quite as high, about 5%.
Lots of factors can possibly determine whether a mail campaign is successful in driving response. According to the classic success formula laid out by the late Ed Mayer, 40% of a marketing effort comes down to your mailing list (i.e., data). Your offer or message makes up another 40%, and 20% is everything else, like format, copy, and other creative elements.
What Factors Can Affect Direct Mail Response Rate
The following section breaks down just a few of the factors that affect direct mail response rate.
- Data – Is it current and clean? Is it segmented? How so? Personalized? How much? Appended? With what data?
- Type of Campaign – Is your campaign acquisition? Retention? Upgrade? Cross-Sell? Reactivation?
- Audience – Who is it, and are you sure about that?
- Industry – Is direct mail the right marketing channel for this product or service?
- Geographic Location – Are you selecting the right geographic segments for this product, service, or audience?
- Copy/Offer – Are you mailing one offer or several? Are they segmented or personalized?
- Form Factor – What format are you mailing: postcards, envelopes, or self-mailers? What type of paper or printing effects?
- Response Device – Are you giving the recipient the right channels to respond?
- Economic/Other Conditions – Is there an external event that may depress response?
- Postal Service Delivery – What mailing class are you using? Is your offer or message time-sensitive?
Average Direct Mail Response Rate vs Digital
For some companies, digital marketing has proven its effectiveness as a cost-effective method of mass marketing. It’s one that brings measurable and high ROI for many businesses of all types and sizes. Metrics like response rate, though, can be low.
One of the most commonly-reported rates is 1% for cold emails. A few sources say the average is closer to 10%. As with direct mail, a number of variables affect response, such as list quality, lack of segmentation or personalization, or frequency.
When compared with digital channels, however, direct mail enjoys a higher ROI. For example, according to ANA respondents, postcards mailed to house lists produce a 92% ROI, comparable to email’s reported 93% ROI.
How to Improve Your Direct Mail Response Rates?
Raising your direct mail response rate usually doesn’t come easily or suddenly. Rather, it’s the result of many smaller moves.
Yes, it is important to consider tweaks or improvements to your list or mail format. But also look deeper for ways to help your mail campaign’s recipients actually take a positive action, instead of tossing it, or visiting your site, and then clicking away.
Here are some ideas:
- Combine Direct Mail and Email – These 2 channels have unique strengths that complement each other in drip campaigns, prospecting, and more
- Design Direct Mail Workflows Based on Triggers – Cart abandonment and other online shopping or browsing behaviors raise response with triggered direct mail because it is seen as timely
- Address Verification Software – Before any large campaign, run your list against National Change of Address (NCOA) and other databases to ensure your data is current
- Make Direct Mail Personalized – Instead of generic mass mail, tap into customer data to make customized offers on a variable data printing (VDP) mailer
- Unique Selling Points – Make your brand stand out by differentiating it from the competition on your mail piece, whether it’s pain points or price points
- Offer Incentives – Sweeten a deal for consumers with a special discount (and make it trackable) and/or throw in a free gift or premium item
- Optimize Your Conversational Strategy and CX – Customer service is a mindset that sets delighting the customer as a continuous process, one that builds trust
- Test Your Campaigns – Always set aside money for testing formats, offers, premiums, headlines, etc.
Direct Mail Response Rates Statistics
Statistics show that direct mail response remains an important and valuable part of many companies’ marketing mix. Here are statistics to show its continuing strength:
- Oversized envelopes have the highest response rate: 5%. -(Data & Marketing Association)
- 60% of catalog recipients visit the website of the company that mailed them the catalog. (USPS)
- 49% increase in sales and 125% in inquiries from customers who received both emails and catalogs. (HBR)
- 59% of marketers use online tracking capabilities for their response (ANA Response Report 2021)
Wrapping it up
In today’s complex marketplace, a high direct mail response rate sounds great but it’s earned by understanding your audience first and foremost. With that focus, you can map out a journey for them, and account for all of the touchpoints along the way to drive the number and type of responses you want for your direct mail campaigns.
Here at mailing.com, our data management experts know how to help you set up the best tracking and measurement practices. Call or reach out to us today to get started on raising the response rates for your campaigns and for your bottom line.