Ever wondered what the average response rate when sending out a direct mail piece is? You may have heard that a 2% response rate is an expected average after sending a direct mail piece. This can be true for certain applications and situations, but not for all. It’s important to understand the applications and situations before you try to predict your response rate.
For instance, a 2% response rate is a good approximation if:
- You are reaching out to an outside mailing list instead of your current customer base. The people on outside mailing lists have no relationship with you, and are therefore considered a cold call list. You may have an uphill battle when it comes to generating a response.
- You are using a free offer that requires little commitment on the part of your audience. Free offers are central to all lead generation campaigns. The concept is simple: you create a free report or white paper on a topic closely related to what you sell. You then offer the report to your target audience – and the people who are interested in the topic will respond. These leads are then considered potential customers.
Because these offers are free, you can expect more people to respond.
Of course, even if these two factors are in place, remember 2% is just the average. You could see a response rate of 1% or lower, which is very likely. You could also see a response as 3-5% – which is very unlikely.
A 2% response rate isn’t as accurate of an approximation if:
- Instead of mailing to an outside list, mail to your house list of previous responders, and you can expect a higher response rate. You could possibly even see much higher than 2% return. This is due to the fact that the people on your house list already know you and have already demonstrated some interest in your topic.
In direct marketing, they say, “the profit is in the list”. This is how catalog and other mail order businesses make their money, by repeat mailings to their house list.
- If instead of using a free offer, use a price offer. You can expect to see a lower response rate – often fractions of 1 per cent. This is the difference between order generation and lead generation. In order generation, you are expecting an actual order in the form of a payment or an agreement to pay.
Even if the price is low (or discounted or spread out in payments over time), price is a barrier to high response rates. It’s not unheard of to see response rates as low as 1/10 of 1% (.001).
So what does all this mean?
Consistency is key and continuing to communicate with good prospects as well as existing customers in different ways is always a good practice. It takes 9 to 11 times for a prospect to see your name to recall it or pay attention to you. Be diligent and stay committed and you will reap the benefits!
Happy mailing and happy selling!