Before we crunch the numbers, let’s look at consumer’s opinions on direct mail.
Direct mail is considered to be the most secure and trustworthy form of marketing. Look at how companies like Google are using direct mail. They do that because it works.
Looking at what the DMA 2015 Response Rate Report we found:
- The average response rate is 3.7%
- The average cost per response is $19 which when compared to other channels is very competitive
- Best performing style by category is an oversized envelope at 5%
- The next best performing style by category is a postcard at 4.25%
- The most expensive category to mail are dimensional pieces at $30 per response
- The next most expensive are catalogs at $23 per response
- The most common way to track direct mail response is online at 22%
- The next most common way is through a call center at 19%
Are these numbers a surprise to you? How do your numbers compare? One key take-a-way is that direct mail response rates are higher than all digital media in the study. Direct mail can benefit your marketing mix, but you need to know your numbers so that you can keep doing what works and fix what is not working. There is no way to predict exactly how well your direct mail campaign will perform, however, knowing what the direct mail averages are helps. You need to know your average to set a baseline. From there you can work on making changes that could enhance your response.
The 3 core components to focus on with direct mail are list, design and offer.
Keep in mind that when you create offers, free things are a better driver than a discount. This does not mean that you have to give away your product or service; you can give away a generic item such as a gift card for coffee. When you decide to make changes, keep a group of people separate from the changes. This will become your control group. You will use the control group results to compare with the changed group results to see which had a better response rate. You can test this many different times or further segment your list with a different change on each segment all at one time.
One other note, most marketers now use more than one channel in order to fulfill campaign objectives. The study found that in most cases marketers were using 3 or more channels. When they were, the channels used most often together were direct mail, email and social media.
When you know your numbers you are able to predict your results with more accuracy and continue to improve the quality of direct mail you are sending out. When you are able to send the right offers to the right people by knowing your results, you decrease your cost per acquisition and increase your ROI. When you are just starting out, you can track your numbers in an excel spreadsheet. This will allow you to compare numbers from past campaigns as well as plan for the next one.
If you have any questions please contact us today. We are glad to help!