Understanding Response Rates to Direct Mail and How to Improve Them

Understanding Response Rates to Direct Mail and How to Improve Them
07 September, 2023 • ... • 541 views
Natasha Zack
by Natasha Zack

In the modern world, direct mail might seem a thing of the past. In fact, it is even sometimes called “snail mail” which implies that it’s terribly slow as compared to email. Yet direct mail is still more than relevant and can bring results unmatched by any other channel if done right. The question is, how do you know if you’re doing it right? 

One way to gauge the effectiveness of your efforts is to measure and analyze the direct mail response rate. In this article, we’ll explain this crucial metric and provide actionable tips on improving it. 

What the direct mail response rate is and why it matters

Direct mail response rate is one of the key metrics to measure campaign results for this marketing channel. Simply put, it is a correlation between the number of mailings sent and the number of responses received in the course of a particular direct mail marketing campaign. 

To calculate the response rate, you have to divide the total number of mailings sent during the campaign by the number of responses received, and then multiply the result by 100 to get the percentage.  

Here’s what the formula looks like:

formula

Example

If you’ve mailed 1,000 pieces and received 10 responses at the end of your campaign, your response rate for this campaign is (10 ÷ 1,000) × 100=1%.

But why calculate it in the first place? 

Measuring response rates for your direct mail marketing campaigns is an effective way to gauge their performance. Optimizing response rates is crucial for effective campaign management, customer insights, and cost control. 

But before you calculate your response rate, you have to measure the response — i.e., count the number of responses received during the campaign.  

How to measure the response

The first step to measuring response is understanding what kind of response you expect to receive. In direct mail marketing, the following actions are typically considered: 

  • Website visits
  • Phone calls 
  • Online purchases 
  • In-store purchases 
  • Social media subscriptions 
  • Email list subscriptions 
  • Direct mail replies 

Here are the most common techniques to effectively track these actions. 

Personalized URLs and UTM labels

Personalized links (pURLs) and links with UTM labels enable direct mail marketers to send traffic to online channels (websites, landings, social media pages) where user actions can then be easily tracked. 

pURLs in the mail piece leads the recipient to a page created specifically for that person, while links with UTM labels allow marketers to differentiate responses by channels and campaigns without creating separate web pages.  

QR codes

Many people find links on printed media inconvenient, even when these links are shortened.  And that’s when QR codes can save the day. These scannable, size-adjustable graphic elements can contain all the same links (for example, links with UTM labels), but in a more user-friendly format. This makes QR codes a great way to not just measure response, but also generate more of it.

A postcard template with a QR code leading to the company’s multi-link page.
Source: QR Tiger

Discount codes and coupons

Everyone loves a good bargain, and you can use that in your direct mail campaigns to drive sales and measure response at the same time. When customers activate promo codes or redeem special offers from your direct mail campaigns, each action counts as a response. What makes this method unique is that you can use it to track both online and in-store responses. 

Unique phone numbers

Many businesses use dedicated trackable phone numbers to measure response for their direct mail campaigns. In this scenario, you have a unique number for each campaign and count each call as a response. To get a unique number for your campaign, order it from a dedicated toll-free number service provider or use call-tracking software such as WhatConverts, CallRail, Invoca, or similar solutions.

Other, less popular, tracking methods for measuring direct mail response include asking an open question to encourage reply and adding a feedback form with a request to fill it out and mail it back.

What is the average direct mail response rate?

So, you’ve measured response and calculated your response rate. But how can you know whether it fares well against your competitors? And what can be considered a good direct mail response rate? One way to understand it is to compare your results with the benchmarks. 

According to statistics by the Data & Marketing Association (DMA), direct mail campaigns show an average of 9% response rate for house lists and 4.9% for prospect lists. But response rates vary across industries. To better assess the performance of your campaigns, look for industry-specific direct mail benchmarks in specialized reports. One more way to obtain relevant data is to ask marketers working in adjacent industries. Reading direct mail case studies is also a good way to get relevant numbers for your industry. 

Another thing to consider is how your response rate relates to response rates for your other marketing channels. As per the 2023 report from Lob, 74% of marketers claimed that direct mail delivered the highest response rate among all their marketing channels. In certain industries such as e-commerce, this figure is even higher — up to 87%. Are your results as impressive? If not, your direct mail strategy likely needs correction.

That said, response rate statistics can only give a general idea of how your campaigns perform. Paying attention to the response quality and calculating your direct marketing ROI can help you see the bigger picture.

Response quality and direct mail ROI

While response rate is a vital metric, it can also be misleading if you don’t take response quality into consideration. 

Though response quality is not measurable and depends on a variety of factors — your campaign goals, first and foremost, — you can still assess and analyze it by asking yourself a number of questions. 

For promotional campaigns that imply generating sales, think of the following: 

  • Does the lead represent your target audience? Some people respond out of sheer curiosity, without the intention of ever buying anything from your company. The farther the respondent is from your typical buyer persona, the slimmer the chances of a purchase. 
  • What is the nature of a response? One person might simply browse the website, while another will add your product to favorites. If the goal is generating sales, the second response will be of a higher quality. 

If the campaign goal is raising brand awareness, engagement can be a good indicator of high response quality. For example, if you send a postcard with a link to your website, then the more time respondents spend browsing it, the better.

One more crucial metric to consider in connection with response rate is return on investment (ROI). If your campaigns generate many responses but hardly any revenue, it’s likely a red flag because ROI is typically high for this channel. For example, according to the 2021 Response Rate Report by the Association of National Advertisers (ANA), direct mail produced an up to 112% ROI. While this figure is surely at the highest end of the spectrum, it can still give an idea of how well direct marketing can perform in terms of revenue.   

However, response rate remains the first most essential metric when assessing the overall health of your direct mail marketing campaign. So, what factors can affect it?

Factors affecting direct mail marketing response rates

Quality of the list

By quality, we mean that the list should only contain valid mail addresses belonging to real people who might actually be interested in your products or services. 

To make sure you have high-quality mailing lists, obtain them legally from direct mail services that offer this option (for example, PostcardMania), and maintain them regularly to keep them in good shape. Later in this article, we’ll discuss mailing list maintenance in more detail. 

Timing

Same as in email marketing, timing is crucial for traditional mail campaigns. If your message reaches the recipient at the wrong time, it can remain unopened for days or, even worse, risks being thrown into waste. 

To identify the best timing, analyze the performance of your campaigns and use available data compiled by other companies. When planning your campaigns, consider such aspects as days of the week, seasonality, holidays, the specifics of your product, and your customers’ typical behavior patterns. 

Offer

Perhaps you’ve heard of the 40/40/20 direct marketing “success formula” that implies that the offer accounts for 40% of the campaign’s success. According to that, making your offer as compelling and eye-catching as possible is crucial to ensure the best results.   

The postcard template below is a good illustration of how you can make the most of the space available by putting the right accents in all the right places. The relevant question catches attention, and the red graphic element right below it makes the offer impossible not to notice.

An example of a print postcard template with a compelling offer from PostcardMania.
Source: PostcardMania

But what if your offer is confidential or you are sending your mailing in an envelope? Even then, you can still make the outside of your mailing memorable — for example, by using colored envelopes instead of the traditional white ones. 

Promoting sales is also a great way to attract more customers to the event, whether it’s held offline or online. 

A postcard template promoting a sale at a furnishings store.
Source: PostcardMania

Creativity

Even the best offers can underperform, especially in competitive industries where there are lots of them. The reason is often simple: the lack of creativity makes a mail piece generic and unremarkable. To avoid boring your recipients, try to come up with something more original than your competitors.   

For example, this postcard instantly catches attention with stylish design and an unusual combination of a child’s photo with the rock entourage. Target audiences will likely appreciate it, and this card won’t get lost in the pile of papers on the coffee table. 

An example of a print postcard template for a music school featuring a creative design idea (a young child in rock attire playing drums)
Source: PostcardMania

Here’s another example of an eye-catching postcard template. This one relies on a catchy familiar phrase instead of design.

An example of a print postcard template for a grooming salon with a creative copy idea (a reference to a catchphrase from Spider-Man)
Source: PostcardMania

Other ways to leverage creativity include trying different formats of the mailings such as oversized envelopes, interactive elements, and more. To get your creative juices flowing, check out our article on direct mail ideas and pick the ones that suit your business best. And there’s also another article with direct mail design ideas for your inspiration. For even more ideas, you can browse social media — for example, Pinterest.

How to improve the response rate for your direct mail campaigns

Whether you are already getting decent response rates for your direct mail campaigns or still struggling to make your strategies work, there is always room for growth. Here’s what you can do to see your response rates climb up. 

Know your audience

If you are not quite hitting the mark, incorrect targeting or addressing your audience in the wrong way can be the problem. 

For example, Millennials don’t always prefer digital communication, and Gen Zers, however surprisingly, lean toward offline shopping. According to data cited by the US Postal Service, 62% of Millennials claim they visited a store after receiving information by mail. Gen Zers, according to a survey by Rakuten Insight, buy offline more than one would expect, with 48% claiming they prefer shopping in physical stores. Knowing these and other important facts about your audiences can help you fine-tune your strategy and significantly improve your direct mail response rate. 

Work on your list

Direct mail or email, maintaining your mailing list and working on its improvement is always a work in progress. To keep your list nice and healthy, you need to periodically revise it to make sure it’s always clean and up-to-date. 

Doing so is more challenging in direct mail marketing than it is in direct email marketing. However, it is still workable. Start your list maintenance by finding and removing any duplicates and typos. Then, revise your list regularly and remove addresses that keep generating returns. 

If your list is big enough, you can also try segmenting it to make your targeting more precise. Keep in mind, though, that segmentation is not always necessary. It also makes content production more complicated, so make sure you really need it. 

Always personalize

Personalization helps evoke positive emotions in marketing message recipients, and it’s true for all direct marketing channels — including direct mail. For example, one survey states that 75% of Millennials claim that personal mail helps them feel special.

An example of a personalized envelope-sized gift certificate template by VistaPrint that can be filled out and mailed to the recipient.
Source: VistaPrint

The most common way to personalize direct mail messages is to use the recipient’s name. Or, you can focus on the buyer’s interest or send out a hyper-personalized offer. For example, if you know the recipient is a music fan, you can offer a discount to the local vinyl store. 

Technically, you can make direct mail personalization work using the Variable Data Printing (VDP) method. Thanks to this technology you can personalize any aspect of a printed piece — i.e., change the recipients’ names, gender, location, or anything else, — without interrupting the printing process. 

Track and analyze the performance

Analyzing the performance is one more essential part of any marketing campaign. Measuring response rates and rates of return is part of this process, but there are also other metrics to track.  

These include conversion rates, cost per acquisition (CPA), return on investment (ROI), average order value, and others, depending on your campaign goals and objectives. To be able to calculate all these metrics, you’ll need data such as the campaign cost, number of orders, total number of pieces mailed, and others, so make sure you have everything stored in one place. 

Having the relevant data, you can identify the strengths and weaknesses of your strategies, identify trends, and make the necessary changes.  

Experiment and test

Once you’ve identified your trends, use this information to form hypotheses and run split tests to determine what works best. 

Same as in digital marketing, you can pick a small group of your mailing list, divide it into two halves, and send two slightly different variations of a mailing to each of these groups. Then, compare feedback from each group and pick the version with more responses. 

You can test various elements of your direct mailings. The most common options are: 

  • Copy  
  • Images 
  • CTAs 
  • Fonts and graphic elements 
  • Personalization 
  • Time of delivery 

For example, here’s what variations for a “personalization vs. no personalization” split test might look like:

Two variations of a flyer template: personalized on the right and non-personalized on the left.
Source: Canva

Additionally, you can also test the format and size of a mailing in direct mail campaigns. Should it be a normal-sized or an oversized envelope? A postcard or a brochure? Should you include a sample of your product? Just test it to find out. Once you identify the winning combination, double down on what works best. 

Wrapping up

Let’s sum up the key points. 

  • Direct mail response rate is the correlation between the number of responses received and the number of pieces mailed, counted as a percentage. 
  • Ways to track response include personalized URLs and links with UTM-labels, QR codes, discount codes and special offers, and unique phone numbers. 
  • Response rate in direct mail is not the same as the rate of return or the return rate. 
  • Knowing the average response rates for your industry is a good way to understand how successful your direct mail campaigns are. But whether your results are somewhere around your industry average or not, you can always try to improve them. 
  • You can use various methods to improve direct mail response rates. These are learning more about your audience, improving your mailing list, implementing personalization techniques, tracking and analyzing the performance of your campaigns, identifying trends, and running split tests. 
07 September, 2023
Article by
Natasha Zack
I’m a professional journalist with 10+ years of experience. Throughout my career, I’ve worked with various kinds of media — print, online, broadcast. Currently, I write copy for brand media and teach English part-time. I also have my own edtech passion project dedicated to teaching English via Marvel Cinematic Universe.
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