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).

---

50 Benefits Of Joint Venture Marketing

What Is A Joint Venture?A joint venture is an agreement... Read More

How to Write a Fundraising Thank-you Letter for Example (Includes a Free Sample)

Thank-you letters are one of the most important letters that... Read More

Promotional Products

As a promotions director for a lot of super markets,... Read More

Fertilizer For Your Grassroots Marketing

Looking for a great way to drive traffic to your... Read More

10 Effective Ice Breaking Questions

Whether you go to a Chamber of Commerce event, a... Read More

15-Minute Marketing: Lots of Results in Little Time

Do you think you don't have enough time to market?... Read More

Receiving a Brochure Printing Quote

Brochures are a great way to get your message across.... Read More

Does Your Marketing Plan Need Changing?

Change is good, right? Not always. But when is it... Read More

How Would You Handle This?

We have been talking about choosing groups to participate in... Read More

How To Bond With Customers So That They Stay With You Longer

How many of your customers are loyal customers? More importantly... Read More

Getting New Clients - When Only a Few is More Than Enough

Many of the business owners I speak with are looking... Read More

Boost Your Business With Testimonials

When used correctly, testimonials can boost your response dramatically. They... Read More

Slogans: Creating and Using Them In Life, Career and Business

Information is coming at us from all directions nowadays. This... Read More

Increase Your Response with Multi-Step Marketing

"There is only one way to judge the effectiveness of... Read More

Marketing With Business Cards

Many businesses today overlook the importance of business cards as... Read More

Small Business Marketing Tip ? Putting the Customer First.

I am a great believer in the keeping to the... Read More

A Questionnaire for Businesses

As best you can, answer the following twenty-five questions. There's... Read More

Take It To The Customer

In the past, purchasing ad space was the solution to... Read More

Trade Show Promotions That Are Memorable

If you have been to expos and trade shows as... Read More

Everything Youve Ever Learned About Marketing Is Wrong

Everything you've ever learned about marketing and advertising is WRONG.... Read More

Where to Find New Customers Using B2B Direct Mail

The challenge in business-to-business direct mail is knowing where to... Read More

Who Is Your Market and Where Are They?

An important part of planning your business is to know... Read More

Make Out Marketing

What is the single biggest fear of teenagers, business owners... Read More

Marketing Strategy 101: 10 Marketing Strategies I Learnt From My Oral Surgeon

This is how the conversation went on my follow-up visit... Read More

Quick Postcard Design Tips

TIP #1: Avoid the "Too Much Information" Syndrome... Read More

Use a Guarantee In Your Headline To Increase Trust

Sometimes you can use a guarantee effectively in your headline.... Read More

Your Marketing ? From The Couch To The Cash Register

When you put time or money into any marketing plan,... Read More

How to Write Irresistible Promotional Pieces that Attract More and Better Clients

Whether you're creating a sales letter, a brochure, a newsletter,... Read More

Increase Your Sales By Following-Up

The difference between a successful business and one that just... Read More

How to Use Marketing Judo to Beat Big Competitors

If yours is a small business and you have big... Read More

Network Marketing Is Definitely A Relationship Business

Heavily branded websites like amazon.com are household names and carry... Read More

Mark Twain?s Great Marketing Idea

To tell you the truth (and about 53% of this... Read More

The Secrets of?

A lot of advertising and mailings promise to reveal the... Read More