Lob’s website experience is not optimized for Internet Explorer.
Please choose another browser.

Tutorials
May 21, 2021

Am I Getting Good Direct Mail Response Rates?

“Am I getting good direct mail response rates?” is not a simple yes-or-no question. Averages vary across industries, campaign types, and more.

But that doesn’t mean the question isn’t worth answering. To gauge the health of your direct mail campaigns, you need to critically assess your responses—including their frequency, quality, your industry’s typical response rates, and so on. This evaluation process will reveal ways to improve your direct mail and help you develop best practices to drive positive results with future campaigns.

How to gauge your direct mail responses

You might think that a direct mail campaign with plenty of responses is a healthy one. Sometimes that’s the case—but the amount of responses isn’t the only relevant factor. Take a more holistic approach by considering your direct mail responses from a number of angles.

Track your response rates

Tracking direct mail responses was once nearly impossible—there wasn’t always a way to determine if a piece of mail got delivered, much less if it was effective. But with digital advances like QR codes and platforms like Lob, tracking can be an easy, automated process.

The most straightforward methods of tracking response rates are:

  • QR codes: Send recipients to a specific web or app page. Ideal for young users.
  • Unique URLs: Send recipients to a specific web page. Ideal for a wide range of users since they don’t need a smartphone to access a URL.
  • Phone numbers: Send callers to a specific department or office with a unique phone number created through a platform like CallRail. Ideal for older recipients.
  • Discount codes: Ideal if your direct mail campaign goal is to drive purchases.

Include any of these four elements in your direct mail design to track responses. With a platform like Lob, you can even take this a step further with piece-by-piece delivery tracking to track the actions of individual recipients.

Once you’ve monitored responses with these methods, you can compare the data against industry benchmarks to gauge the health of your campaign.

Gauge response rate benchmarks

According to the Association of National Advertisers (ANA), the average direct mail response rate is 9%, which is pretty impressive compared to the 1% average response rate for email.

Direct mail response rates can vary based on industry and type of direct mail. To set a benchmark for your campaigns, find out what the average is in your sector.

Here’s a high-level stat to get you started: over 64% of businesses (in financial services, e-commerce, travel, media, auto, telecommunications, insurance, and healthcare) agree that direct mail delivers the best response rate of all their channels. If you’re in one of these industries, is direct mail one of your top channels? If not, your response rate could likely be higher.

To set a specific benchmark, talk to others in your industry. Direct competitors may not be willing to reveal their response rate to you, but you can ask companies in adjacent industries what their average response rate is. If you work at a major shoe retailer like DSW, you could talk with someone in clothing retail. Or, if you work at a regional credit union, talk with someone at a credit union in another region.

When chatting with industry experts about their direct mail campaigns, be sure to ask about their ROI to see if they are on par with the average direct mail ROI of 29%.

Lastly, consider how response rate averages differ across types of direct mail:

  • House vs. prospect lists: The ANA reported that the average for house lists is 9%, while the average for prospect lists is 5%
  • Direct mail type: The ANA reported that oversized envelopes have the greatest household response rate, followed by postcards and then letters.
  • Type of campaign: Retention campaigns are most likely to have a response rate higher than 10%, while acquisition campaigns are typically in the 5–10% range.

Compare these results with your own response rates to gauge the health of your direct marketing.

Document response quality

Response rate is only half of the equation. Pay attention to how qualified the responding leads are, too.

A variety of factors determine response quality, and they differ depending on if you’re running marketing campaigns or transactional campaigns.

For marketing initiatives, ask yourself the following questions:

  • Does the lead align with your audience? If you sell home improvement goods, there’s little value in a response from someone living in a rental apartment.
  • Did the lead do more than just respond? Did they convert? Conversions could include signing up for your newsletter, making a purchase, joining your rewards program, and so on.
  • If the lead hasn’t made a purchase yet, did they show a high purchase intent by adding an item to their cart, visiting your site for more information, or reaching out via email with questions?

Evaluate your response rate quality based on the answers to these questions. Did you answer “yes” to most of them? If so, your direct marketing is on the right track.

For transactional initiatives, like sending an invoice, ask these questions:

  • Was the recipient’s response timely? Check whether they met the deadline you set in the direct mail for the transactional request—whether that’s paying a bill or filling out a form.
  • Did they complete all the necessary tasks? If the direct mail was about setting up an account, check whether the recipient did that and accepted all terms and conditions.

The business intelligence and data analytics company Saylent built Lob into their proprietary platform to execute direct mail campaigns and track the quality of responses. Find a platform such as Lob that you can integrate with or build into your current tech (preexisting platforms or proprietary) to do the same.

How to improve future direct mail response rates

Even if you already have decent direct mail response rates, there is always room for improvement. Use the data you collected in the last section to optimize future campaigns.

Identify your trends

You’ve tracked your response rate and quality in the last section. Now it’s time to investigate the similarities across campaigns with many high-quality responses.

One way to identify these trends is to use multivariate testing. Find a platform like Lob that makes testing different variations easy with functionalities like modular HTML templates.

Once you’ve gathered information about your response rate and quality, form some hypotheses about what elements made your campaign effective or ineffective. Then use these templates to test different elements such as designs, copy, etc., to determine what drives a higher response rate. For example, if you’re a bank advertising a new credit card via letters, test different layouts and imagery or highlight different benefits of the card.

Double down on what works

Once you’ve identified trends across successful campaigns, use those insights to optimize your next campaign.

Let’s stick with the bank example. Maybe messaging about the travel rewards of your credit card drove higher response rates than highlighting the low APR. Great! Double down on highlighting travel rewards in your direct mail.

You may also find that some imagery works better than other visuals. If multivariate testing showed that your campaigns thrive with human imagery, double down and use these photos in more (if not all) of your campaigns.

Use a platform like Lob to automate the process of doubling down and update dynamic content in real-time for continued optimization. With this automation, you can spend less time and money analyzing your results and redesigning your direct mail.

Once you’ve doubled down, don’t stop tracking your results. You may find that what works changes over time. In the era of COVID, you may find it’s better to highlight that low APR instead of the travel rewards...at least for now.

Develop best practices

Based on the trends you find and what you double down on, you can extrapolate best practices and put together a style guide to steer all your campaigns going forward. This will help you ensure they’re effective and consistent, no matter which team member takes the lead.

Here are some hypothetical best practices you may uncover:

  • Personalization: It’s best to address recipients by first name only for a more human interaction
  • Messaging: The tone of your campaigns should be upbeat and friendly
  • Direct mail length: Letters and forms should be kept under five pages
  • Tracking method: QR codes are the best way to track response rates

Document these best practices in a single document or wiki with a tool like Tettra or Zendesk that is easily accessible for all team members.

Combine your direct mail and omnichannel marketing

As you implement your new best practices and continue tracking your campaigns, you’ll be able to continually improve your response rate and scale your direct mail initiatives.

But remember, your direct mail marketing strategy is only as strong as your omnichannel marketing strategy. When your direct mail is triggered by digital behaviors, it becomes more timely and relevant to your customers’ needs—and as a result, is more likely to drive a higher response rate. To improve your direct mail response rates further by integrating your digital and direct mail marketing, check out this article.


Continue Reading