Data and Audience
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Measurement and Reporting
Understanding your direct mail response rate is a crucial aspect of understanding the value of your direct mail marketing campaign.
A direct mail response rate is a measurement that reflects the percentage of people that responded to your direct mailing campaign. While a good direct mail response rateiDeliverability rate is a ratio that speaks to how many emails in an email marketing campaign actually reach the intended recipient's inbox. If 100 emails are sent and only 5 of them are actually delivered to an inbox with the rest being caught in spam filters, that illustrates a very low deliverability rate. Many believe deliverability rate is an even more important metric... Read More can objectively be discovered, its value is highly subjective. You may receive a good or high percentage of responses from your personalized direct mail marketing campaign, but the value of the campaign will be determined by your marketing objectives and the purpose of the campaign, rather than just responses.
There is a difference between a direct mail campaign that focuses on increasing sales and one that targets an audience to provide information and generate leadsiLead generation is a way to reach potential customers early, get them in your pipeline and then nurture, educate and communcate with them as a way to earn their trust and build a relationship until you convert them into a customer. Productive lead generation should result in increased brand awareness, new relationships, higher quality leads, and ultimately more sales. Comp... Read More. For example:
Though many businesses are tackling digital transformation — transitioning manual practices to digital processes — direct mail marketing is far from dying as an old-school marketing practice. Direct mail has an average response rate of 4.4 percent, compared to a 0.12 percent response rate for email. Response rates for direct mail tend to range 10 to 30 times higher than digital mail, and 60 percent of recipients note that receiving and handling direct mail makes a longer-lasting mental impression that is easier to recall later on.
Studies on direct mail and how to use it most effectively note that:
While an average response rate may be 4.4 percent, direct mail has lasting impacts that should be considered when evaluating your marketing campaign. Additional direct mail statisticsiAnalytics is the analysis of raw data to extract meaningful patterns or information. In the marketing world, analytics tell us a lot about consumer behaviors, which can affect how we market to those consumers. If analytics show a consumer only eats healthy food based on their online shopping and searching history, they are probably not the best target for communication fro... Read More show that 42.2 percent of direct mail recipients either read or scan the mail they receive. Though you may not be increasing your response rate, you are earning valuable impressions with your target audience. Additionally, 73 percent of American consumers say that they prefer direct mail, as they can read it at their leisure, which may not always be calculable for a response rate.
To weigh the value of a direct mail marketing campaign, you may include the response rate among other variables, including the overall cost of the campaign. There are different types of direct mail commonly used; postcards, letters, newsletters, and catalogs. Each type of direct mail will come at a different cost for design, printing, and dispersal.
If your business is sending out direct mail at a large scale for informational purposes, you might consider the difference between these two campaigns where the goal is to send out 5,000 pieces of direct mail.
Campaign A: 5,000 informational postcards:
Campaign B: 5,000 letters:
While this analysis focuses on the cost per response, you may also consider a more meaningful analysis by exploring the return on investment (ROI) — what your company gains or what goals are accomplished through your direct mail campaign. Businesses should consider using different direct mail materials for different target audiences and campaigns, and fine-tuning their mailing list to ensure that your more expensive campaigns are reaching your specific target audience for the greatest ROI.
A return on investment is a financial ratio that uses a formula to measure the gain, achievement, or profitability from an investment. The ROIiReturn on investment (ROI) is simply the measure of what was spent on a marketing campaign compared to the sales that were a result of that marketing campaign. More simply put, for every dollar a company spends on marketing, how much money is that effort generating in sales. On a larger scale, ROI is a key metric used to not only determine success of markteing efforts, but... Read More formula is as follows:
Using the return on investment model alongside the direct mail response rate may provide you with an even deeper understanding of the value of your direct mail marketing campaign. In general, direct mail marketing statistics show that the average ROI for direct mail campaigns ranges between 18 percent to 20 percent.
Consider an automotive direct mail campaign for a car dealership:
Even though the direct mail response rate was extremely low — .1 percent, the return on investment was 36 percent (due in part to the high cost of the product), and the net profit from the direct mail campaign was $40,000.
Measuring the effectiveness of your direct mail marketing campaign may extend beyond calculating your direct mail response rate and your ROI. You may also consider calculating your response quality — how many of your response rate made a purchase. Or, setting up tracking methods such as a phone number, coupon code, or URL to track the sales or leads generated by the campaign. To track the effectiveness of your direct mail marketing, you should first consider the key performance indicatorsiKey performance indicators, or KPIs are important measurements that are used to gauge the efficacy of a marketing campaign. For example, is the goal of a certain marketing campaign to convert leads? gain social media followers? get subscriptions to a newsletter? At the onset of a marketing campaign, it's important to determine what your barometers for success are, so that ... Read More (KPIs) that are used as metrics to discover the performance of your campaign.
Additional KPIs and marketing metrics for a direct mail campaign may include:
Understanding your direct mail response rate is a crucial aspect of understanding the value of your direct mail marketing campaign. However, to truly know the value of your direct marketing campaign, your direct mail response should be considered in tandem with other qualifying marketing factors and indicators.