Response rates are the lifeblood of any successful direct marketing program. They serve as a valuable currency, indicating the level of success achieved by marketers. However, response rates go beyond mere numbers; they must be balanced with the cost-per-response and conversion rates to truly measure the effectiveness of a campaign. While different marketing channels may boast impressive response rates, it is the realm of Direct Mail where higher conversion rates and Return On Ad Spend (ROAS) can be found.
In this chapter, let’s dig into the art of increasing response rates by finding the right message, offer, and call-to-action in Direct Mail Campaigns. By understanding the factors that influence response rates and implementing specific tactics and techniques, businesses can optimize their direct marketing efforts and achieve greater success.
Understanding Direct Mail Response Rates
Though they may seem similar, response rates are different than conversion rates.
The Direct Mail response rate refers to the percentage of recipients who respond to a Direct Mail Campaign by taking any kind of action, such as visiting a website, making a phone call, or sending a reply. It measures the initial level of interest or engagement generated by the Direct Mail piece.
The conversion rate, on the other hand, specifically focuses on the percentage of respondents who not only respond but also complete a desired action, such as making a purchase, subscribing to a service, or signing up for a newsletter. The conversion rate reflects the effectiveness of the Direct Mail Campaign in driving actual conversions and achieving the desired goals. While the response rate provides insights into the initial interest, the conversion rate provides a deeper understanding of a campaign’s ability to motivate recipients to take the desired action.
Both metrics are important for evaluating the overall success of a Direct Mail Campaign, and they provide distinct perspectives on customer engagement and campaign performance.
Marketers need to measure both response and conversion rates within their channels–email, social media, display ads, Direct Mail, etc. There are some channels – like Facebook – which might show astonishingly high response rates (measured by click-throughs), but extremely weak conversion rates, meaning actual purchases. It’s very easy to “respond” to a Facebook ad (one only needs to click the link), but in many cases, the conversion is lost when the user arrives on the website or landing page.
Conversely, we find through statistics that Direct Mail drives higher conversion rates and Return On Ad Spend (ROAS) because the users who respond tend to have a higher intent. Over the course of thousands of Direct Mail Campaigns, we’ve learned that those responders are often more inclined to make a purchase.
Businesses need to have reasonable expectations about the range of response rates, and knowledge of how to drive them with specific tactics and techniques that play to the strengths of Direct Mail.
Average Direct Mail Response Rates
Typically, marketers should expect a response rate of 2.7% – 4.4% with their Direct Mail Campaigns. When budgeting or planning, a lot of marketers stay uber-conservative and use a 1% to make the math easier. For example, if they’re mailing 10,000 pieces, they expect about 100 of those prospects to respond.
It’s very important to note that response rates for retention campaigns, i.e., Direct Mail that’s going to existing house file records, will be higher than for acquisition campaigns, where you’re marketing to brand new prospects.
Boosting Direct Mail Response Rates with Digital Channels
When you utilize digital integration in your Direct Mail Campaign, the response rates can increase dramatically. Adding digital channels like email and display ads, response rates have been shown to lift about 30% over sending Direct Mail alone. All the studies have indicated that layering – or stacking – channels will increase the overall response rate from the original targeted audience.
As we will discuss further in Chapter 7 of this guide, sending consistent messages across multiple channels reinforces your brand and marketing campaign. Direct mMil can serve as the initial touchpoint, followed by email and display ads as reminders or reinforcement. This multi-channel approach keeps your brand top-of-mind and increases the likelihood of customers responding to your Call-To-Action (CTA).
The Best Ways to Increase Response Rates
Like we mentioned when we discussed Direct Mail lists, the right marketing list is the best way to increase response rates over normal averages. As we often say, you don’t market lawnmowers to condo owners. Getting your Direct Mail piece into the hands of the right people will boost Direct Mail response rates in any industry.
Beyond the list, the offer and CTA have the most influence.
Crafting an Irresistible Offer
Offers that are very persuasive, loaded with value, and seemingly irresistible are often called “The Mafia Offer.” They are simply too good to pass up. Irresistible offers might be:
- A “percentage off” price
- Buy-One-Get-One (BOGOs)
- Exclusive discounts or subscription rates
- “But wait, there’s more” offers
Offers that have a timed expiry date also help drive response because the urgency of action will prompt prospects to jump on those opportunities. You may consider, for example, a back-to-school offer, as the date is naturally set.
If you’re marketing with frequency, it’s generally a good idea to change the offer from time to time, so the customer base can’t anticipate what the offer will be. If you always offer 20% off with each Direct Mail Campaign, the offer becomes less influential. We find that fall clearance sales work really well in driving Direct Mail response rates as there’s an expectation of running out of inventory.
Optimizing the Call-to-Action
CTA devices need to be simple, easy to follow, and clearly tell the prospects what to do, and why they will be rewarded with their action.
- Common CTAs include
- Calling a phone number
- Visiting a website
- Activating a QR code
- Downloading content
- Receiving FREE materials, resources, consultations, or estimates.
The CTAs that drive the highest response rates are the easiest to understand. Tell them exactly what to do, and give the most benefit to the prospect.
Leveraging the Physical Layout of Direct Mail
For Direct Mail, the physical layout makes a huge difference. The beauty of Direct Mail – like postcards – is that it can be touched, flipped over, and has room for design devices that highlight CTAs. These visual devices could be
- Perforated lined boxes (like a coupon)
- Big numbers
- Other visual call-outs that grab attention on the actual card.
We find that contrast is a big help for CTAs in particular.
Rather than scrolling through emails, websites, and posts, or seeing small digital ads with limited space, Direct Mail gives the marketer a variety of layout options. Direct Mail can take advantage of two sides of a postcard or even letters and envelopes. There’s simply more physical space to give an offer and CTA the right design to get attention.
Personalization and Segmentation
Personalization and Segmentation play a role in creating a good response rate for Direct Mail, with Segmentation being more powerful.
Personalization usually involves adding a name or an image (like products more likely to be attractive to a particular buyer) that relates to the prospect in a more one-to-one manner. Personalization is effective, but in general, the additional cost of Variable Data Printing (VDP) to attain personalization is not proportional to the response rates. Meaning, response rates don’t lift that much to overcome the additional cost.
Segmentation is a tried-and-true marketing strategy for targeting the right audiences with the right message and offer. Oftentimes this approach is just the smart work of dissecting a mailing list to understand better what would motivate your targeted audience. For example, if a brand sells both men’s and women’s apparel, segmenting a list based on gender makes sense to send a gender-based message and product promotion.
Consulting with Experts and Tailoring Strategies
For marketers new to Direct Mail, it’s a very good idea to consult with a Direct Mail Expert to help determine what blend of the list, offer, CTA, design, and digital integration would best lift response rates.
Much of the work to determine how to rise above the average depends on the business, the tolerance for the offer, and what kinds of ways the business can handle the responses.
Each business has different conversion methods, too. If a business has an excellent call center that has a high rate of conversion when they get someone on the phone, include a CTA that incentivizes prospects to call. Or, if there are specific high-converting landing pages that have been proven to work, use a QR Code to make it clear that the offer is available on that landing page – and make it a mobile-first design.
A seasoned professional can be a huge asset in this process.
By Keith Goodman, VP Corporate Marketing & Sales