In the last two decades, direct mail has become a polarizing topic of discussion among marketers and business owners.
Does it work? 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.
The answer?
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!
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:
The Formula:
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.
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.
There are several things you can do to help generate a higher response rate from your direct mail campaigns.
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:
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.
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:
Location Targeting
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.
Demographic Targeting
This type of targeting uses several different demographic data points to target your ideal customers. These points include:
Business Targeting
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
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.
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:
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.
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.
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?
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.
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:
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.
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.
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.
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.
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