People new to direct mail often wonder what kind of response (expressed as a percent) they should strive for. Don’t be fooled. Percentages are useful for tracking results, but your ultimate goal should be a response that leaves you in the black financially, regardless of percentage. In short, a response that attains break-even is “good.” One that beats break-even is “great.”
Don’t just count initial sales in your direct mail response rate
Caution: By counting responses alone, you may underrepresent the success of your mailer. That’s because, longer term, “a response” can represent more than just the initial sale associated with it. When direct mail creates a repeat customer, a lower response rate can still be good or even great.
If, for instance, your average customer tends to make four purchases per year, just one response may be worth four times what you might have thought in terms of profits. Don’t shortchange your good results.
Determine if your direct mail response rate is realistic
The next question before you mail is whether the response you need to attain is realistic. The surest way to a reliable answer is to test your mailing to a representative sample of your mailing list. Short of that, you might compare notes with others in the direct mail business to see how they have fared with like mailings. (Be sure to check with people who know how to do effective direct mail. There is an art and a science to it. Do not be discouraged by people who unwittingly do a poor job.)
It’s important to agree with management — ahead of time — on what constitutes a good response. If your mailing pulls a response that happens to be profitable, the last thing you need is a management team that’s disappointed because they’d “heard somewhere” that a higher number was “considered a good response.”Direct Marketing 101, Small Business