Direct Mail Response Rates Mislead if You are Careless

I could tell you that the average temperature in the world is 60 degrees Fahrenheit. But that fact wouldn't keep you from getting sunstroke in Cairo. Or frostbite in Tuktoyaktuk. Averages tell you only so much.

Direct mail results only tell you part of what you need to know. They tell you the percentage of people on your list who responded. That's it. They don't tell you if you broke even. If you made a profit. Or if the sales people who followed up on the leads closed any sales.

Response rates are misleading if you read them incorrectly. For example, I recently wrote a fundraising package for a North American nonprofit. The letter, mailed to a list of 6,850 donors, generated 35 gifts (responses). Run the numbers and that's a response rate of half of one percent, a dismal result. But this number is misleading because my client (against my recommendation), mailed the letter to everyone donor in his database, including lapsed donors who had not made a donation for years.

So I asked my client how many active donors he had in his database. Two hundred, he replied. That's 200 active donors out of a list of 6,850 total donors. Run the numbers again, and you'll see that my letter generated a 17.5% response rate when mailed to active donors, or, to put it another way, when mailed to a good list.

Another problem with response rates, valid as they are, is that you cannot use them for every industry. Take the Olympic Games. When a nation applies to the International Olympic Committee, requesting that the Olympic Games be held in their capital city, they need a 100% response rate to succeed. They need one "client" to buy their proposal or their mailing has failed.

Take a magazine publisher. It mails to 500,000 names, generates only a 1% response rate, yet considers the mailing a success. But a stock. broker who targets wealthy doctors in Lower Manhattan has different expectations. His lead generation letter needs to generate a response rate of at least 25% because he only mails it to 100 doctors, and he only closes around one in every 25 doctors who responds. A one percent response rate, even if it is an average, is of no use to him.

Average response rates are useful when they are for your product or service and your target audience in particular. If you can discover the response rates that your competitors are generating by mailing sales letters to the same prospects that you are targeting, then, by all means, use those response rates as a yardstick against which you compare your results. You are talking specifics.

Some response rates for various industries.
The Direct Marketing Association (www.the-dma.org) calculated the average response rates for a number of industries:

Fundraising: 5.35%
Retail: 3.36%
Businesses selling services to businesses 3.34%
Manufacturing: 3.17%
Personal and repair services 3.07%
Travel 2.98%
Computer/electronics: 2%
Packaged goods: 2%

About the author
Alan Sharpe is a business-to-business direct mail copywriter who helps business owners and marketing managers generate leads, close sales and retain customers using creative direct mail marketing. Learn more about his services and sign up for free weekly tips like this at http://www.sharpecopy.com.

© 2005 Sharpe Copy Inc. You may reprint this article online and in print provided the links remain live and the content remains unaltered (including the "About the author" message).

---

4 Easy Ways to Get Free Marketing Exposure

Are there really ways you can get valuable marketing exposure... Read More

How to Protect Yourself Against the Hidden Cost of Shipping to Trade Shows

Trade Shows are lots of work, but they can generate... Read More

11 Ways to Turnaround a Cash-Strapped Business or Practice

This past weekend I received a disturbing message from a... Read More

How To Market Effectively Even If No One Understands What You Do

So how do you effectively market your product or service... Read More

10 Important Marketing Tips

Each of the following Ten Marketing Tips is based on... Read More

Business to Business Direct Mail Offers that Say Free

In direct mail, the offer is the incentive or reward... Read More

The Use of Bar Code SMS in Mobile Marketing, Advertising, CRM

Anybody that frequents shopping malls are familiar with the bar... Read More

Marketing as a Spiritual Practice II: Unearthing Your Potential

Marketing as we know it is over. Done. Finito.People the... Read More

3 High-Impact Fixes For Your Marketing Woes

How many times has your competitor gotten one over on... Read More

Does The Market Really Want It?

At the very heart of any successful marketing strategy is... Read More

Determining Marketing Effectiveness Even If You Didnt Track

What if you've done a variety of marketing activities over... Read More

Good Marketing Pays for Itself

Most companies ask themselves this question: "How much will this... Read More

6 Simple Ways to Determine Which Marketing Ideas Are Best for Your Business

Did something catch your eye in a direct mailing this... Read More

Postcard Direct Mail Marketing Tips And Ideas

Postcards are perhaps the least expensive way of reaching a... Read More

Business Cards That do the Business

A business card makes a statement about who you are... Read More

The Power of a Survey

How many times have you been asked to participate in... Read More

Dear Friend: Dont Start Your Non-For-Profit Fundraising Letters As A Stranger

Dear Friend:Don't do it.Don't start your fundraising letters with "Dear... Read More

Mobile Auto Detailers and Newspaper Companies as Clientele

If you are a mobile auto detailer or mobile car... Read More

Take My Commitment (to Your Biz) Quiz!

Starting and managing a successful small business takes time, energy,... Read More

Terrific Titles, Happenin Headlines

You've probably heard the slogan, "You never get a second... Read More

Is Your Marketing Working...

That is the question, you should be asking yourself. Many... Read More

Tradeshow Booth Cures - Ancient Cures for Modern Day Problems

At first glance, nothing seems more chaotic than a trade... Read More

What?s Next? A Guide to Marketing Your New Business

Coming up with an idea, seizing the opportunity, and setting... Read More

21 Must-Have Web Site Elements

Your Web site should be the cornerstone of your client... Read More

Most Wanted Response... How To Make It Work

"When I walked into the grocery store last Saturday, I... Read More

How to Take Your Law Firm to the Next Level

How to Take Your Law Firm to the Next Level... Read More

Money-Makers Secrets to Renting Profitable Mailing Lists

As an entrepreneur involved in selling and/or promotion... Read More

Sum of Its Parts

I just spent a week at the beach with my... Read More

When The Stars Align - Choosing the Right Entertainment

Savvy event producers follow the Golden Rule: know thy audience.... Read More

Digital Printing vs. Press Printing ? A Comparison Guide

When it comes time to print your brand identity materials,... Read More

To Swag or Not to Swag: Tip to Brand Your Tchotchkes on a Shoestring

It's interesting to see how resourceful people become when starting... Read More

Direct Marketing ? Brand Identity Guru Tips

If your company doesn't have a direct marketing program in... Read More

Good Marketing is Like a Bad Habit

You know those bad habits we get. Like raiding the... Read More