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Why I Don’t Give a Sh*t About My Response Rate

(Sorry, a 30 something from my marketing department convinced me to try that subject line – ha!)

After one of the most turbulent years ever, I thought I’d start 2021 on the right foot by providing you with a series of videos that dive into crucial marketing info.

The first video dives into an important metric that many seem to misunderstand – even my own marketing consultants need to be corrected from time to time!

What is the difference between response rate and Return on Investment (ROI)? It’s a commonly confused metric that is absolutely necessary to understand when trying to measure a marketing campaign’s performance!

Understanding the difference between the two is critical for knowing if your marketing is really working or not. Being able to properly measure a marketing campaign’s performance could be the difference between a thriving business and one on the brink!

Big Takeaways:

1. Response rates are not applicable to your individual situation because you can’t operate off of averages!!

These kinds of statistics are useful for determining which marketing channels would be the most effective for many different businesses, but when trying to gauge how successful an individual campaign could be, it makes absolutely no sense.

There is no way for anyone to guess what your marketing campaign’s response rate will be because there are no guarantees in marketing. However, there are a few variables that will be extremely influential on your campaign’s success:

  • Your industry: the DMA puts direct mail’s response rate at 9%, but for which industries? If real estate investors get an 18% response rate but dentists only get .5%, that still averages about 9% — and those are 2 very different response rates.
  • Local competition: not only how much local competition you have, but how much marketing are they doing? What marketing channels do they focus on?
  • Time of year: seasonality is a massive component in some marketing campaigns. You would never market a Christmas tree farm in July, right?
  • Previous brand awareness: many of the most successful postcard campaigns occur because the mail acts as a reminder of a local business they already love. When initially trying to build this brand awareness, it may take some consistent mailing and time to solidify your local presence!
  • And many, many, many more uncontrollable variables…

2. Focus on the return on investment (ROI)!! If I spend X amount on my marketing, what amount will I get back?

There are 2 important factors you need to pay attention to when calculating your ROI…

  1. Immediate ROI: Quick results means quick money that you can immediately invest back into your business or put into your pocket! This is the more obvious ROI metric that everyone tends to focus on.
    PLEASE NOTE: Focusing too much on immediate ROI can actually hurt you down the stretch. With this “turn-and-burn” mentality, your focus is on that campaign’s immediate results and not the ripple effects that continue when the advertising stops flowing. Remember – in business, there is no finish line, and you should apply this mindset to your marketing!
  2. Long-Term ROI: There are a couple of ways to measure this success metric, but the most important is a new customer’s lifetime value, or how much this new relationship will generate in revenue for you over time. Their first purchase will be accounted for in the immediate ROI, but what about their following purchases, orders, or renewals? How long does each customer stick around?If each customer’s lifetime value is lower than you thought, you may be too focused on conversions and not on customer retention and reactivation. Take some time to focus on creating sustainable growth! Maybe start a marketing campaign to previous clients to remind them of your amazing services!!The other major way to measure long-term ROI is your company’s presence in the community. While this is a more difficult metric to measure, it certainly is an important one. When someone needs your product or service, what’s the first local business they think of? If it’s not yours, you have some work to do!!

The very best campaigns will create both an immediate cashflow ROI and solidify loyal customers — however, this can be difficult to pull off. Your best route to get what you want is to set your campaign’s goals BEFORE you start a marketing campaign so that you can build the campaign around those goals.

Do you simply need a quick revenue boost? Or are you trying to create a more lasting effect on your business? Different marketing tactics are better for different business goals.

Need any help determining what your business goals should be? My marketing consultants help small business owners figure out what their business needs every day.

If you have any questions or concerns, don’t hesitate to reach out to us at all 800-628-1804 for a FREE, no-obligation consultation!

If you have questions about anything I’ve discussed here, you can always email me at or just leave a comment below.



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