How to Increase Direct Mail Response Rate: 9 Clever Strategies
By Ivan Boychuk on August 27, 2020
In the last two decades, direct mail has become a polarizing topic of discussion among marketers and business owners.
Does it work? Is direct mail still effective? Does it provide a decent ROI?
Since the digital boom that has occurred over the past two decades, these questions are shared by many business owners and marketers alike.
Yes, direct mail can be an extremely effective marketing strategy for your business. In fact, data suggests that it is even more effective than most forms of digital marketing.
However, like any other marketing strategy, its success is largely based on the response rate you’re able to generate. In this post, we’ll explore exactly how you can improve your direct mail response rate to increase your marketing ROI.
But before you can increase your response rate, you need to know how to calculate it!
How to Calculate Direct Mail Response Rate
Don’t worry – you don’t need to use any complex equations to calculate your response rate!
The response rate of a campaign simply compares the amount of mail you sent out to the number of people who follow through and take the recommended action included in your mail piece. This action could be:
Booking a consultation with your company.
Visiting your website.
Purchasing a product.
Signing up for an event.
The process for calculating the response rate of a campaign is quite simple. Just divide the total number of responses you receive by the total number of mail pieces you sent out.
Responses / # of mail Pieces Sent = Response Rate
For example, if you send out 1000 pieces of direct mail and generate 100 responses, you would divide 100 by 1000 to get a response rate of 0.10. To get your response rate as a percent, just multiply this number by 100.
Knowing the response rate of your campaign can provide valuable feedback from your campaign. For example, you might notice that certain geographic locations always yield a higher response rate. When this is the case, it might be worthwhile to target other similar locations in the future.
What is a Good Direct Mail Response Rate?
Now that you know how to calculate the response rate, you’re probably wondering what kind of response rate you should be striving for with your direct mail campaigns.
After all, you need to establish a starting point from which to build upon.
Estimates suggest that the average response rate for a direct mail campaign is in the neighbourhood of 5-9 percent.
Based on our experience creating and executing hundreds of direct mail campaigns, we’ve found that this 5-9 percent is a pretty reasonable estimate. That said, with some personalized campaigns we have seen response rates as high as 25% or more, while some general campaigns have had a response rate of just 1%.
Also, it’s important to understand that the response rate isn’t the be all end all in direct mail.Instead, sometimes it’s better to look at the cost-per-response.
Instead of just analyzing how many responses you received for a certain amount of mail you sent out, the cost per response tells you how much you actually paid to get each one of those responses.
If you’re interested in learning more about how much a direct mail campaign will cost, feel free to check out this article.
9 Ways to Increase Your Direct Mail Response Rate
There are several things you can do to help generate a higher response rate from your direct mail campaigns.
1. Define Your Audience
The first step of every direct mail campaign should be to understand exactly who your message is for. Once you know this, you will be able to create a message that specifically targets this group of people, helping to increase your direct mail response rate.
Here are some tips that you can use to help define your target audience:
Look at your current customer base – the best way to find out who is the right fit for your product or service is to look at your existing customers. Why did they buy from you? What are their interests/demographics? What type of customers generate the most revenue?
Assess your competition – who are your biggest competitors? What kind of customers are they targeting?
Consider the products/services you’re offering – who would benefit the most from your product or service? Who has the most to gain? Who has the most to lose if they don’t purchase your product or service?
Target specific demographics – what is the age group, gender, marital status, location, education level, income, and occupation of your ideal customer?
Consider psychographics – what personality traits, values, and behaviours do your best customers share? What type of lifestyle do they have (interests, hobbies, etc.)?
Evaluate your decision – are there enough people who fit your target market? Do they have enough disposable income to purchase your product or service?
The more specific you are during this stage, the better. In fact, it’s even a good idea to create several customer avatars to help clarify the messaging of your direct mail campaign.
2. Leverage Advanced Targeting
Strategically targeting your direct mail campaigns to reach a specific group of customers is one of the best ways to increase your response rates.
Now, this process is easier than it has ever been.
According to an article published by Direct Mail Shark, there are 5 main ways business owners and marketers can target their direct mail efforts:
You can target customers based on the location you expect to find them in. For example, you can send a direct mail piece to a specific neighbourhood, street, postal code, or even a preselected radius surrounding your business.
This is an especially helpful strategy used by businesses with physical storefronts to help attract local foot-traffic to their stores.
This type of targeting uses several different demographic data points to target your ideal customers. These points include:
Place of residence (House, apartment building, etc.)
Business targeting is used when your ideal customer happens to be another business (B2B). With this type of targeting, you can filter through businesses based on whether they are a corporation, government agency, nonprofit organization, or any other type of business.
Businesses that exclusively market to other businesses stand to benefit the most from this type of targeting.
Psychographic targeting differs from demographic targeting in that it also considers the psychological state of your prospects. This includes their values, hobbies, personality traits, attitudes, likes and dislikes, interests, and more.
Understanding this information will help you choose the people who are most interested in your products and services and likely increase your direct mail response rate.
Sales Stage Targeting
Finally, you can target people based on the stage they’re in within the sales cycle. In order to maximize your response rates, it’s worthwhile to send out different messages to new leads compared to those who have already purchased from your business before.
3. Personalize Your Direct Mail
Everyone enjoys a little special attention from time to time. We like to be reminded that we’re one of a kind, not one of 8 billion.
So when companies go out of their way to personalize their message to customers, the results can be very impressive.
With direct mail, there are several ways to personalize your messaging:
Include the first name of the recipient. If the first line of your message reads, “Hey you,” it’s much less likely to capture your attention than if it reads, “Hey (your first name).”
Customize your message for a specific gender. If you’re selling a product or service exclusively to men or women, consider trying to alter your messaging to mirror this gender’s interests.
Make reference to your location for localized direct mail campaigns. Establish common ground with your audience by referencing your location. For example, you might want to mention a certain Edmonton landmark or attraction so people know your business is in their area and they should check it out.
Use past purchasing history in your message. If someone has previously bought a product from you, consider retargeting them by offering a complimentary product.
Send follow up mail pieces. If someone has engaged with your business but did not make a purchase, send them a reminder. This can be a personalized message that shows them you noticed their absence. For example, you could start with: “We haven’t heard from you in a while, is everything okay?” before proceeding to your message.
Personalization can be a great way to increase your direct mail response rates. Just remember, there’s a difference between personalization and just plain creepy.
It’s important to understand where the line between the two is and to make sure you don’t invade your customer’s privacy.
4. Use Quality Design
Design is one of the deciding factors for whether or not someone will pick up your direct mail piece or just toss it into their “junk mail” pile.
However, while you might be tempted to get carried away creating the perfect design, it’s important to remember that the sole purpose of your design is to support the message of the direct mail piece.
The design elements should flawlessly combine to get the reader to read the first sentence, then the second sentence, and eventually arrive at your call to action at the end of the piece.
5. Write Compelling Copy
The copy on your direct mail piece serves as the voice of your brand. Not only does it need to convey a sense of excitement, but it should also clearly explain to the reader the benefits of following up with their offer, or, what will happen if they don’t.
When writing copy, it’s important to always keep the customer in mind. What message would make them interested in your business? How can your products and services help them? How can you earn their trust?
6. Include a Strong Call to Action
You would be surprised to know the reason why so many business owners and marketers struggle to generate a respectable response rate from their direct mail efforts.
It’s because they don’t ask for one. Well, at least not clearly.
Whether you’re selling a product, getting someone to sign up for an event, or anything else, you need to make it crystal clear to the reader how they can follow up.
When creating your call to action, it’s important to avoid the use of passive language like “can” or “should.” This makes your call to action sound like a suggestion rather than a necessity and in today’s day and age, people are much too busy to follow up with suggestions.
For example, here are a couple of examples of weak calls to actions:
“If you are interested, you can purchase our product here.”“If you would like a copy of our magazine, order it on our website.”
Now here are some examples of strong calls to action using active language:
“Don’t wait! Purchase our product here!”“Get a copy of our magazine from our website today!”
Notice how these examples use the element of time (Don’t wait! And Today!) as a motivating factor? This helps encourage customers to act now rather than later.
7. Provide an Incentive for People to Respond
Incentives blend together nicely with a strong call to action and are another great way to motivate prospects to respond to your direct mail messages.
Here are a few common incentives that have proven to be successful in the past:
Coupons – coupons can be physically cut out of your direct mail ad or made available to prospects by using a QR code. This is a great option for service-based businesses. For example, a hair salon could create a coupon that provides 50% off the first hair cut for new customers.
Gifts – everyone loves gifts. Your direct mail campaign can use the promise of gifts to encourage people to respond to your mailers by creating a sense of urgency: “the first 50 people to respond to this letter will receive a free…”
Discounts – customers are often reluctant to part with their hard-earned money unless they feel they are getting a deal. Discounts are a great way to supply this feeling and get people to purchase your product or service.
Samples – one of the biggest barriers to selling products to customers through direct mail is the inability for them to test them out. Within your direct mail piece, you can offer free samples to customers who respond to your message, helping them overcome this issue.
Exclusive programs – even children love to feel like they’re a member of an exclusive club or friend group. As adults, this desire to be part of something is still very much alive. Membership groups that offer exclusive perks like free shipping or weekly discounts can be a great way to increase direct mail response rates.
Charitable donations – more than ever, customers are choosing to purchase from companies who exhibit social responsibility. Promising to donate a portion of your proceeds to a charitable cause will increase the chances of people responding to your message.
The important thing to remember with your incentives is that they need to be something the customer actually wants. There’s no sense trying to use outdated or irrelevant products and gimmicks to get people to respond to your direct mail campaigns.
8. Combine Direct Mail With Online Strategies
For the best results, it’s important that you combine direct mail with online strategies. This is called multi-channel marketing and has been proven to significantly increase the ROI on marketing spend.
The idea here is to target customers who interact on different channels. For example, direct mail is an extremely effective way to target some people, however, others might prefer email or social media.
Multichannel marketing ensures your message will get in front of your ideal customers, regardless of which channels they choose to interact with.
9. Test, Tweak, Repeat
Finally, it’s important to understand that refining your direct mail campaign to maximize response rates is an ongoing process.
You will need to keep testing new things, making changes, and testing them again.
Eventually, you will find success and be able to put your campaigns on autopilot. The real magic happens when you find something that works and you can start scaling your campaign to reach more people.
Direct Mail Services in Edmonton
ION has been helping Edmonton businesses with their direct mail campaigns for more than four decades. We can help walk you through every step of the process, ensuring your business will be able to maximize the response rate from each of your campaigns.
Please contact us today to learn more.