Direct Mail Response Rates
The direct mail response rate is the percentage of total reactions, inquiries, and engagements derived from your audience as a reply to your direct mail items.
Marketers need to ascertain the response rates beforehand in order to determine the budget, ROI, and other related aspects of the campaign. Keep reading below to know more about direct mail, response rates, and ways to track and increase responses.
An Overview of Direct Mail
Direct mail includes sending marketing collaterals to your target audience directly to their physical mailboxes. This form of marketing is adopted by marketers to cut through the advertising clutter and connect with the decision-makers or purchasers personally. A well-designed direct mail campaign with an excellent copy and eye-catching graphics can help achieve all your marketing objectives.
When we start comparing digital marketing with direct mail marketing, we should first get our statistics straight. According to the DMA, direct mail response rates are around 10 to 30 times higher than digital marketing response rates. Therefore, it is not wrong to say that direct mail is a powerful marketing channel and can produce great results when done right.
To increase responses, companies should select the right type of direct mail. Some of the popular types are:
- Personalized letters addressing all the customers’ needs and representing your brand as a solution to your prospects is an impactful idea.
- Transactional, financial, and compliance mail like bills, receipts, cheques, policy change notices, bank statements, confirmation letters, and more are also sent as mail items.
- Postcards are great marketing materials – great for inducing responses and relationship building.
Please note that response rates are calculated only for marketing direct mail like postcards and letters and sometimes for invoices as they are used to prompt payments.
What Is A Good Response Rate For Direct Mail?
A common question asked by marketers is, “what direct mail response rate should I expect from my campaign?” Other common questions include “what makes a good response rate?” and “how to calculate responses?”
There is no one answer to these questions as the response rate depends on the quality of responses, marketing objectives, type of mailing lists used, campaign costs, and more factors. The direct mail response rate is calculated as a percentage, obtained by dividing the number of responses by the campaign’s size. For example, the response rate will be 2% if you mailed 50,000 mail items and 1,000 people responded.
In general terms, 2% can be considered as a good response rate. But, it is considered so if the mailing list was bought or rented from a mailing lists vendor. 2% is also classified as a good response rate when a paid CTA was included. However, if you have used an in-house mailing list and included a free offer, 2% might just seem average. It is because more people are likely to reply in exchange for something that is available for free, but that doesn’t guarantee a paid conversion.
Targeting Your Audience for Maximum Response Rate
Be it small startups or huge corporations, segmenting and targeting your audience can always be a direct mail response rate booster. However, keep in mind that not all responses are productive. Here, we need to know what a good-quality response is.
Basically, a good-quality lead or response has the potential to convert a prospect into a paid customer either right away or in the near future. Some people do respond initially but are never converted into customers, even after a lot of follow-ups. It leads to time and effort wastage.
Let us get deeper into it. If you get a response rate of 2% from a particular campaign, but your conversion rate is only 5%, then your net response rate is only 0.1%. But, if you get a response rate of only 1%, but the conversion rate is 30%, it’ll bring your net response rate to 0.3%.
Hence, quality matters, and mere percentages can’t decide the success of your campaign. Your responses might be great quantitatively but can still lack quality.
What Steps Should Be Taken to Target an Audience Better and Improve the Quality of Responses?
Below are some steps that marketers can take to target the relevant audience and get better responses.
1. Conduct Market Research
Market research can be conducted either by using primary or secondary data. Preliminary data consists of information taken directly from your prospects or customers. Secondary data, on the other hand, is based on findings from other sources.
When you conduct market research, it gives you a glimpse into your audience’s thinking. Marketers are able to know about the recently prevailing market conditions and trends. Companies can circulate questionnaires, compare their offerings with their competitors, follow different direct mail strategies, and form reports based on all these things. The group that is more responsive towards your market research activities is likely to respond to your direct mail items.
2. Segment Data According to Demographics
Segment your audience according to various demographics. Targeting becomes easier when you classify your market and are clear about your buyer profile. Your prospects’ age, income, gender, marital status, and location are examples of the factors you should use for better segmentation and targeting. Targeting the right people according to this information can help receive valuable responses.
3. Ask for Feedback and Implement It
The easiest way to collect and record feedback is to ask your current customers. Ask them what they like and dislike about your brand campaigns and mention that any suggestions will be appreciated. Make sure to implement this feedback in your upcoming campaigns to boost response levels.
How to Calculate Direct Mail Marketing ROI
The quality of your campaign responses is highly dependent on the overall ROI. You need to know a few figures related to your campaign to calculate the ROI:
- Campaign Size
- Total Cost
- Estimated Response Rate
- Estimated Conversion Rate
- Average Purchase Cost Per Customer
Now, we need to put these numbers together in formulas that can help us calculate the direct mail marketing ROI.
- Cost Per Piece = Total Cost / Campaign Size
- Total Number of Responses = Expected Response Rate x Campaign Size
- Total Number of Conversions = Conversion Rate x Total Number of Responses
- Total Revenue = Average Purchase Cost Per Customer x Total Number of Conversions
- Net Profit = Total Revenue – Campaign Cost
- ROI (%) = Net Profit / Campaign Cost
The ROI can be positive, negative, or even break-even. However, marketers should always focus on getting maximum quality responses and achieving a positive direct mail marketing ROI.
How to Track Responses
There are a number of ways of tracking responses and measuring campaign results. One of the most common ways is to include a unique contact number in your direct mail. Ensure that the number is trackable and is not mentioned anywhere else other than your direct mail items.
Personalized URLs are also becoming increasingly popular for tracking direct mail responses. Insert the pURL at a place that is easily visible on your mailpiece.
Coupon codes and QR codes can too provide the path towards efficient response tracking. Using coupon codes, you can convince your prospects to visit your store for redemption. QR codes, when scanned, can take your prospective customers to a personalized landing page. Hence, you can easily track their responses.
Be ready to store all this data and put together detailed reports that can be used as references for your future campaigns.
Improve Your Direct Mail Response Rate With These Practical Tips
With so much competition in the marketing field, businesses should do their best to make their direct mail items stand out from the crowd and get opened. Moreover, these marketing items should be able to garner more and more responses. For that to happen, you need to try out new things.
Marketers can opt for using glossy paper stock for printing their letters or postcards. Alternatively, they can simply select attention-grabbing envelopes with interesting designs.
Do not skip on the personalization part, as they are known to drive conversions. If you expect someone to respond to your direct mail, at least address that person with their name and not some generic term. A handwritten letter can work great.
Another trick is to mention benefits rather than features. It adds value to your brand and helps connect with the audience instantly. Furthermore, add catchy titles and bright colours to make your direct mail appealing and easily readable.
Get More Responses with Least Amount of Time and Effort
Though it might seem that conducting direct mail campaigns in-house can save a lot of money and gather more responses, the reality is far away from that. If you want to save time, effort, and money truly – go for an automated direct mail solution like PostGrid.
With timely follow-ups, quick deliveries, detailed reports, campaign insights, segmented mailing lists, verified addresses, and more, companies can increase response levels significantly and maximize their ROI. PostGrid’s print and mail solutions can help you with everything from designing to mailing your direct mails with the highest efficiency and response gathering capabilities.