Direct Mail Marketing FAQ: What Response Rate Can I Expect? (video)

While the heart of this question is good, unfortunately it is a little misguided. The reason is that response rate is not really what you should use to measure the success of your direct mail postcard campaign (or any marketing push for that matter). What you need to look at is return on investment. This means how much money in terms of leads and sales the campaign produced in comparison to how much it cost.

You see, it is possible for a campaign to actually produce a lot in terms of revenue for you, but not actually produce that many responses. An example of this is if you have a very high-price item you are selling. You may only get a handful of responses, but if two or three people buy you could pay for the campaign twice over. That would be a marketing strategy you should stick with, even though the response rate doesn’t appear to be that great.

Another example would be someone who sells a lower price item that is a recurring purchase. In this case, you need to factor in how often an average customer buys from you in order to know just how valuable that lead really is. Maybe you don’t turn a profit on the first sale, but by the fifth you do. PostcardMania works with this kind of model.

Here’s a video of me talking in more depth about the difference between response rate and return on investment: Direct Mail Marketing FAQ: What Response Rate Can I Expect? Give it a quick watch…

VIDEO TRANSCRIPTION:
Response-rate is not the thing that you want to be looking at. You want to think, ‘What return on investment do I want?’ That depends on so many things. If you have a product that you sell, that is a couple thousand dollars, you need less responses to make a lot more money than somebody who sells something for $30 or $50. If you sell something for $50, but that customer reorders from you over and over again, then you have a lifetime value of a customer of $5,000.

You have to understand what the formula is. How many customers do you need to make X-amount of money right up front, and what is that going to be over the course of a lifetime? How much money will you make off of that one mailing, overall? You need to look at your return on your investment, not necessarily your response rate.

There are certain industries that will get higher response rates. Those industries are niche industries, like a chess school or a swimming class for infants, something that is very niche and not a million competitors. If you are a dentist or a chiropractor, there are other dentists and chiropractors marketing at the same time, using the same mediums that you are using, so your response rate is going to be a little bit lower. Again, if your website is fantastic and really engages the visitor, you will get more responses. If you have a good campaign to collect identities of people going to your website, you will get more responses.

It is really, ‘The ball is in your court,’ on that. It depends on your product and it depends on how many competitors you have. You really want to look at, ‘How much money am I going to make?’

Let’s discuss in the comments. Was this info useful?

Best,
Joy