Marketer’s Guide to Direct Mail Response
By Paul Bobnak | August 26, 2021
Direct mail response is everything that matters. At some level, everyone understands that this is true.
Your mail campaign may have been planned for many months down to the smallest detail. Your mail piece may have won awards for innovation when submitted to competitions from industry groups. And your creative staff may be in love with the design or print techniques you used.
But numbers don’t lie. As marketing guru Denny Hatch says, “You can’t judge good direct marketing; it judges you”.
But how does it judge you? You can only fully understand your response when you’re able to track your results and measure attribution. When you know what is driving results, you’re better prepared to make decisions moving ahead.
What is a Direct Mail Response Rate?
Direct mail response is all about numbers – what you spend versus what you get back in purchases (or for non-profits, donations).
What numbers should you be on top of? These:
- Campaign Costs – Add up the expenses for your campaign, such as creative (writing and design), printing, postage, marketing, programming, and list rentals. This gives you a good starting point.
- Cost Per Piece – Divide your campaign costs by the total amount of pieces mailed. Depending on the complexity of the piece, the audience, the USPS mail class, and many other factors, your results can vary widely.
- Response Rate – Divide the total count of responses by the number of pieces mailed, then multiply by 100. This figure, though, can be misleading, as it doesn’t always indicate if a mailing succeeds or fails.
- Conversion Rate – Divide the number of sales by the total number of responses, then multiply by 100. Again, the quality of the sales achieved may be more important to the overall success of the campaign than the amount of sales.
- Return on Investment (ROI) – Subtract revenue generated by the mail piece from the campaign costs, then divide by the campaign costs. Next, multiply that result by 100 to get the ROI figure.
What is a Good Direct Mail Response Rate?
This is a common question. But not an easy one to answer.
Let’s step back a second.
Direct mail enjoys high response rates compared to other channels. In the annual ANA/DMA Response Report, marketers surveyed said that house lists produced a 9% response with direct mail, while prospect lists achieved a 5% return.
However, keep in mind that many factors can affect the response rate of any given campaign. 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.
Each of these three main pieces is affected by many decisions that figure into your marketing plan:
- Data (Is yours current and clean? Is it segmented? How so? Personalized? How much? Appended? With what?)
- Offer (Are you mailing one offer or several? Are they segmented or personalized?)
- Everything else (What format are you mailing: postcards, envelopes, or self-mailers? What mail class? What type of paper?)
It goes on from there, but you get the idea. The point is that the total cost for each decision figures into your response rate, and even more importantly, your campaign’s ROI.
How to Set Up Direct Mail Response Attribution
To know if and how your campaign is working, you need to attribute where the response came from. Whether you have a single touchpoint or multiple points, your tracking data will need to distinguish which one should be credited for the conversion.
Identify Proper Tracking Methods for Measurement
Once your mail campaign has dropped, some of the most crucial work begins from the moment responses of one kind or another pop up. Basically, you need to understand:
- Who is responding?
- How are they responding?
You need to know exactly what response channels provide value – and how much, because it may not be as obvious as it seems at first glance.
Fortunately, several approaches can help you evaluate the performance of your campaign.
Unique Offer Codes
Offer codes are a simple, low-tech way to identify and track response. When printed on a mail piece, they can be referenced across any single or multiple channels as you choose. However, if you have an identical promotion, sale, or offer on any of those channels, set up a different code in your CRM system to provide the right attribution.
URLs for Web Response
Once you have set up a promotional URL (e.g., yourcompany.com/AugSale1), you can track responses to mail with that limited-time web page. Even when it’s expired, any hits that are redirected to another page or the main page are still attributable to the promotional URL.
Your analytics platform can tell you a lot about shopper behavior, such as pages visited, time on each one, and purchases (or abandoned carts).
Personalized URLs (PURLs) are also trackable. But because they can be populated with unique data for each customer, they can give you additional insights on their shopping experience when used by a consumer. These insights can lead to better-targeted opportunities in the future that drive a higher response.
Phone call tracking is enabled by using a unique answer number for a specific campaign, as well as for specific audience segments if desired. Call tracking software matches numbers called to a sale, lead, or other outcome.
Whether a number is a dedicated toll-free line or a local number, the call goes to a call center or forwards automatically to a regular business line. Or, for local companies taking a much simpler approach, calls to a single number can be tracked by staff along with a coupon code from the mail piece.
Response by mail pre-dates any other channel and is responsible for the growth of many companies, as well as the of the industry as a whole. The attribution here is simple. The response device is physically received and can be quantified by a bar code or other tracker on the:
- Reply form
- Donation form
- Business or courtesy reply card
When a sale or other response can’t be directly tracked (as it is with a URL), a matchback analysis provides a way to attribute it.
This simple technique measures direct mail response effectiveness by cross-referencing mail campaign recipient data with purchase data for a specific period of time. The length of time to look at depends on your product or service.
Remember, one study says that direct mail has a 17-day lifespan. You’ll want to account for customers who delay responding to an offer until they’re ready.
Besides names and addresses, recipient data may also include source (or list) codes as well as offer codes. The customer order data can include purchase date, any offer or other codes, or identifying information, such as an account number (depending on the channel).
Attributing visits to a physical location such as a store, car dealership, etc. from a direct mail piece can be difficult.
For the sale or other transaction to be registered, a coupon code is one common method. It can be printed on a mail piece and be scanned at the point-of-sale. Through matchback tracking (see above),a customer’s use of a loyalty, membership, or rewards card can also be traced to a mail campaign even if an actual piece is not presented.
5 Ways to Increase Your Direct Mail Response Rate
Raising your response rate usually doesn’t come easily or suddenly. Rather, it’s the results of many smaller moves. Yes, it is important to consider tweaks 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.
Many direct mail best practices can help your piece stand out, and move the recipient along the funnel using the AIDA (Attention-Interest-Desire-Action) model. Here are a few.
1. Identify Specific Target Audiences
“Everyone” is not your audience. Your campaign should be going to specific groups of people who have something in common, like geography, demographics, behavior, and lifestyle. With a segmentation strategy, you improve your direct mail response by tailoring your offers, copy, and more for better engagement.
2. Personalize Each Piece
Bland images and irrelevant copy get ignored. Could you use data to make the mail piece more intriguing or meaningful? Variable Data Printing (VDP) makes it possible by leveraging the recipient’s personal profile.
3. Maximize Design & Copy
A postcard or self-mailer with a crowded design overwhelms the recipient. To make it easier for them to focus on your offer, use larger, concise headlines and white space.
4. Offer Incentives
As automotive dealers and repair shops will tell you, coupons work because they drive customers to their doors (and websites). And with a response code, they’re easy to track (see above).
5. Create an Experience
Amazon supplies stickers for kids (of all ages) in its holiday catalogs. Fundraisers mail calendars that demonstrate support. In both cases, print helps create a tangible and powerful way to experience a brand.
Wrapping it up
There’s no single attribution method that works best in today’s complex marketplace. The reality is that measuring campaign performance means paying attention to all of the channels along the customer journey and understanding what role they played in conversion. Every point of contact on your mail piece needs to be unique and accounted for to provide attribution. With these insights, you can decide what customers to focus on and get the biggest and best bang for your buck.
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 both your response rates and campaign ROI.