Direct Mail Response Rates

We are always asked, What is the average response for direct mail? We wish we could answer this question but it all depends on the campaign.  

There are so many variables that go into each direct mail campaign that all effect the response rate.  The two biggest factor are the list and the offer. If you send the right offer to the right people they will respond.

We estimate about 1% response rate but we see campaigns with much higher response rates and some with lower.  The Direct Marketing Association estimates response rates at 9% to a house list and 5% to a house list. Yet, the sample size for this study was small and to us seems higher than what we typically see, but it all depends on the campaign.

We prefer to estimate low when estimating ROI but advise to try to improve the list and offer whenever possible to help increase response rates.  There are many other variables that should be looked into and optimized but the list and offer are the ones that typically affect the response rates the most.  It is also important to evaluate the lifetime value of a new customer when looking at response rates and ROI.

What response rate should I expect from direct mail?

Your response should depend on your offer, targeted list, and design of your piece.  The number 1% tends to be used in the direct mail industry but that is arbitrary as the response rate depends on how you design your piece and what you are offering.  For example a piece that offers a coupon for a free product will have a much higher response rate than a piece offering 10% off.  Similarly a mail piece sent to current customers should have a higher response rate than a piece sent to prospects.  The design of the piece also influences response rates as the message should be clear and easy to act on.

It is better to look at direct mail campaigns return on investment rather than response rates.  Especially if you are advertising a high value product or looking to acquire a new customer who will make frequent purchases looking at the ROI is a much more effective evaluation than looking at the response rates.  Additionally some campaigns will be designed to be more generic and elicit a smaller response rate while others can be more elaborate and personalized and require a higher response rate.

Measuring your ROI is important in evaluating your mail piece and continuing to test and improve the piece to increase ROI.  There are many factors that will influence your response rate but it is important to design your campaign to reach a target response rate that will create the largest return on investment.