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Click2Mail Analysis: The DM Association’s Annual Response Rate Report - How Do You Compare?

Dec 06, 2009

When the Direct Marketing Association released its "2009 Response Rate Report" earlier this year, a number of conclusions stood out:

  • Response rates were higher than in previous years, perhaps because mailers now better manage their lists and employ more sophisticated targeting methods.
  • Direct mail still makes up 35% of the average marketing budget, compared to e-mails’ 12.6% (so, no, direct mail is not dead).
  • Internal “house” lists generated much higher response rates than purchased “prospect” lists (3.69% compared to 1.65% on direct order mailers and 3.86% compared to 2.04% on lead generation mailers).

 

Why response rate matters

The DMA releases its annual report to provide marketers with industry-average response rates to use as benchmarks in their own mailing. Response rates matter because they directly affect the return you see on your marketing investment (your ROI).

For example, an accountant sends out 1,000 lead-generating postcards to a prospect list. With an industry-average response rate of 2% and costs of $1,500, the accountant’s ROI is 320%. If he could boost his response to 3.5%, his ROI would jump to 560% – a better return given the same investment.

5 easy tips to boost response

As you measure the results of your direct mail campaigns, compare them to industry averages. If your rates are better, congratulate yourself on a job well done. If they’re not, here are some ways to improve your response:

1.Improve your list
They say that 40% of a mailer’s success (or failure) is due to the quality of the mailing list. In other words, you need to have a great list. While an in-house database yields far better responses, if you want to generate new leads or orders outside of your existing customer base, consider renting or purchasing a list. (Click2Mail can help.)

2.Change the offer
Another 40% of a mailer’s success (or failure) is due to the offer. If you’re not seeing the kinds of response rates you might expect, given the industry benchmarks, test different offers. Split your mailing list randomly in half and then run your mailer sending Offer A to one half and Offer B to the other. Some offer elements you may want to test are:

  • The type of discount (“20% off” versus “$15 off” versus “Buy One, Get One Free”)

  • Your “giveaway” (the item of value you give away to generate leads – it could be a free report or an e-book, or perhaps a free consultation)

  • How often you repeat the offer, and the graphical elements you use to display it

  • The language you use to explain the offer (do you make it sound too good to pass up?)

3.Make your copy more attention-grabbing It’s a sound bite world out there, you have to get your message across quickly – in a way that is interesting, memorable, and leaves your reader hungry for more. Even if you’re mailing a letter or catalog with a lot of copy, make your text stand out in blocks, with easy-to-scan headlines that reach out and grab your readers’ attention.

Whatever the total length of your copy, use action words and short, powerful sentences. Take master marketer David Ogilvy’s advice, “Don’t scorn tried-and-true words like amazing, introducing, now, suddenly."

4.Think more “Wow”
Most people sort through the mail standing over the trash can. To avoid being a casualty of the “Who cares?” response, your mail piece must stand out. One way to capture at least the initial attention of your recipient is to increase the size of your mail piece. Larger size postcards, for example, have proven to generate greater responses than smaller postcards, by simple virtue of the fact that they stand out in the pile.

Another relatively easy way to keep your mailer in your recipients’ hands (and out of the trash) is to add bright, bold colors and eye-catching graphics. Graphics that are unusual, funny, or somehow play on a person’s heart strings (the babies and kittens effect) can be particularly effective at getting your prospects’ attention.


5.Get personal
Ogilvy said, “Use the word ‘you’ liberally."  Speak to your targets, not at them. Imagine that you’re in an elevator with the recipient of your mailer, giving her your 30-second pitch. You’re one human being talking to another.

Click2Mail makes that kind of human-to-human personalization is easy. Our Mailing Online Publisher allows you to personalize your document by incorporating any of the variable information fields included with your mailing list. That way, you can integrate information such as a customer name, salutation, account number, balance due, appointment date, and more.

At the end of the day, these 5 relatively easy, cost-effective ways to boost your direct mail response rates are well worth the effort; boosting your response by just a percentage point could add many times that much to your bottom line.