While digital marketing provides tons of useful analytics, there are still effective ways to track your direct mail return on investment. There are several formulas to determine direct mail success. The first one we will examine is RESPONSE RATE.
You do not need to know calculus, but these simple math formulas calculate direct mail response rates:
• Response rate = Responses/pieces mailed
• For example… 10,000 pieces mailed, divided by 200 responses, equals 2% (.02).
You will also want to compare response rates during a marketing campaign versus when you do not conduct any marketing.
• Direct mail responses – Average response rate during similar time span with no direct mail… Then divide that by the average response rate without direct mail.
• For example… 200 responses, minus 100 new business leads during same month span prior year with no marketing, equals +100… That equals a 100% response rate lift from your direct mail campaign.
This begs the question: “So, what kind of response rate should I expect?” According to the Data & Marketing Association, direct mail response rates average – yes, AVERAGE – 9% for house lists. In addition, the average response rate for a prospect list is 4.9%. You may be thinking these numbers are high. Results will vary depending on many factors (list, the offer, location, etc.), but the studies show significant improvement in overall direct mail response rates. In fact, these figures mark the highest response percentages since 2003 when the DMA began tracking.
DIRECT MAIL VS. EMAIL
Direct mail, in fact, crushes digital marketing response rates by a sizeable amount. One major reason is that mailboxes are not as cluttered as they were in the past. And they are nowhere near as clogged as email inboxes. In addition, studies are showing that brand recall is significantly higher with direct mail marketing than with digital advertising. Smart marketers are realizing this and they are taking advantage of the paradigm shift.
Contact Mail Manager, Inc., to find out how to maximize your direct mail response rate.