What is a Good Response Rate for Direct Mail Marketing?

Measuring the response rates of your direct mail campaigns is crucial for working out where your marketing efforts should be spent. The direct mail that turns prospect lists into paying customers is the one you want to invest in.

Direct mail response rates are a great indicator of how your direct mail marketing strategy is performing. Use it to guide future campaigns and integrate it with your overall marketing efforts.

What is direct mail response rate?

Response rate is the number of people that respond to your marketing campaign. A response might be clicking on a link, calling a number or interacting with your campaign in any way.

Response rates are very simple to calculate: divide the number of responses by the number of recipients and multiply the result by 100. The percentage you get is your response rate.

But what is a good response rate for direct mail marketing? That depends on a few factors, including:

• Your industry: If you’re reaching out to a particularly hard-to-reach market, it will be more difficult to create a successful campaign.
• The depth of your customer data: The more detailed and accurate information you have in your customer database, the better you can expect your campaign to perform.
• The size of your business and brand recognition: How established is your business? It’s much easier to convert an audience that already has some awareness of your brand.
• Previous interactions with recipients: It’s even easier to convert an audience that already has a positive perception of your organisation. Those that have interacted before are more likely to do so again.
• The quality of your direct mail campaign: This one’s obvious but very important. You only have a few seconds to capture and hold the attention of your direct mail recipients. Make it work.

Direct mail response rates

According to research by Zipdo, the average direct mail response rate is 5.3%. Compared with email marketing, which has a response rate of 0.6%, that is pretty impressive. But what is a good direct mail response rate?

Good response rates are subjective, but anything better than the average response rate is positive.

If your goal is to get a higher response rate with your direct mail campaign than other channels, you can use your average response rates as a benchmark. You might also look at benchmarks for your industry.

Other metrics to consider

Although your direct mail response rates are important, a meaningful campaign performance evaulation needs to include:

• Response quality: Not every response will lead to new customers. Some may not even be a positive response. By measuring the quality of your responses, you can compare different campaigns on a deeper level. If you have enough customer data, you can also draw insights from the way different segments interact with your direct mail marketing.
• Customer lifetime value: How much revenue a single customer will generate for your business.
• Impressions: Comparing your response rate to the number of people who saw it (rather than the number of people who received it) might be beneficial. Direct mail campaigns can leave a valuable impression, even if it doesn’t initiate a response right away.
• Direct mail campaign costs: When measuring ROI, a high response rate is worthless if your marketing spend is extortionate. Work out how much each customer is worth, and don’t let the acquisition costs jeopardise profits.
• Key performance indicators: The metrics that are important to your organisation are unique. Think of your KPIs for the current campaign, and the business overall.

How to measure direct mail response rates

There are different levels of measuring your direct mail response rates. You may simply want to track the overall number of responses, or you may want a more meaningful analysis. The depth of your analysis depends on how detailed your mailing lists are, so try to capture as much information on potential customers as possible.

Tracking software uses QR codes with a trackable URL to measure the source of website traffic. You can give each segment a different URL to see which has the higher response rate. If your conversion goal is phone calls, you can also use trackable phone numbers.

How to improve your response rate

1. Target your campaigns: If your marketing is directed towards your target audience, they are more likely to respond positively. Your response quality is also better if everyone who received it is interested in your brand. Don’t dilute your response rates with uninterested recipients.
2. Offer a deal: Coupon codes and other offers are irresistible to the right people. When you know your target market well, you can give them what they want. Offering real value is the best way to get a higher response rate.
3. Integrate your marketing efforts: Make online and offline marketing work together by using direct mail marketing to generate leads. Once your campaign reaches your audience, QR codes can bring them online.

To get the best ROI on your direct mail marketing campaign, you need to keep track of what works well. Response rate is a great indicator of who’s interested in your value proposition. You can use the average response rate for your industry or other campaigns as a benchmark.

It is more difficult to track your direct mail response rate, as direct mail does not lead the digital trail that online campaigns do. Active Mail can help track the effectiveness of your direct mail campaign and provide valuable insight into where to direct your budget.

For more information on our end-to-end marketing and mailing services, call (02) 9540 5488 or head over to our contact page.