Direct Mail Response Rates: What to Expect
Direct mail marketing is a time honoured method of reaching out to potential customers with offers and deals that has, surprisingly, seen little decline in its use despite the huge rise of email marketing.
The reason for the use of direct mail over email is probably attributable to the way the human brain is wired: we’re much more likely to engage with and remember a physical object that we’ve picked up and handled (i.e. an envelope that comes through our letter box) than a subject line in our email inbox. No matter what our opinion of direct mail, short of letting it pile up on the doormat we have no choice but to pick it up – even if the reason for picking it up is to take it straight to the bin.
Which brings us to the most important factor for a business considering whether to conduct a mail campaign: what are direct mail response rates and will they provide a return on investment? In short, is it worth the effort?
Direct Mail Response Rates: Case by Case
The response rates for a direct mail campaign vary wildly depending on what you’re offering, how good your target list is and how well the campaign is conceived and executed.
Typical response rates range from as high as around 5% to as low as 0.1%
In order to work out whether direct mail is the right route for you you’ll want to calculate the response rate that will allow the campaign to break even and then decide if surpassing this response rate is realistic.
Example
You’re planning to send out a mailer to 2,000 recipients. The total cost of your mail campaign, including any data purchasing, design, copywriting, envelope stuffing and postage is £1,500.
The sales you make as a result of the campaign will return an average profit of £50.
In order to achieve £1,500 of profit you therefore need to make about 30 sales. That would require a response rate of 1.5%
Such a response rate would seem achievable but of course it all depends on how confident you are that the list of prospects is well targeted and accurate and that the sales copy is engaging and likely to solicit responses.
You may also want to take into effects other than direct profit generation i.e. raising brand awareness, building a word of mouth effect etc and attribute a cost value to such effects when determining your break even response rate.
Tips for Improving Direct Mail Response Rates
Of course the number of people who are engaged enough by your direct mail shot to actually pick up the phone and make a purchase will depend heavily on how well targeted your list of prospects is and the quality of the material you send out.
The following is a list of concrete steps you can take to increase the response rate of your recipients and maximise the profit generated by the campaign.
- Ensure data is targeted, up to date and accurate
The data (lists of names and addresses) will ideally have been gathered by your company in previous encounters with the individuals in question so that you already know the prospects are familiar with your brand and interested in the products and services you sell. However, sometimes (mainly for B2B purposes) it’s necessary to acquire data from a third party. In these instances make sure the mailing list is as targeted as possible – that the recipients match your customer profile as closely as possible, that they’ve shown interest in similar products or services etc. Make sure that the data is up to date and that gone-aways and names of position holders has been updated frequently. The quality of your mailing list is the single largest factor affecting response rate so be thorough and if purchasing/renting a list, use a reputable supplier who can tailor their data to your needs.
- Personalise your mailings
Dear Sir/Madam is a big turn off. Use your recipient’s name to increase the engagement factor.
- Use an unbranded envelope
You only get one bite at the cherry when it comes to engaging your recipient and this is most likely to occur after they’ve opened the envelope. Use the curiosity factor to your advantage and don’t show your hand too early.
- Hire a copywriter
Writing good copy that engages the customer is an art form and should be left to a professional. Crafting attention grabbing headings, engaging the reader emotionally in the body copy and wording an effective call to action requires skill. Skill that many believe they possess while few actually do.
- Use one call to action
Be it a telephone number, website address or stamped addressed envelope but don’t confuse your prospects with too many options and make it easy for them to put off indefinitely.
- Use personal signatures
Your recipients will appreciate being contacted by a real person much more than by a company or a ‘team’. Use real signatures to sign off, even if they are printed rather than signed manually (which would probably be too time consuming!)
- Find an excuse for a PS
People who scan letters often read a postscript first so make sure you use one - include a very concise summary and clear call to action.
- Find a way to track responses
This might be setting up a unique phone number just for direct mail responses or getting customers to quote a promotional code. Knowing how successful the campaign was and exactly how many responses were elicited will be essential to deciding the revenue generated and whether it’s worth doing again.
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