Posted by eleventy on Jun 27, 2012
The Direct Marketing Association (DMA) recently released their 2012 Response Rate Report. DMA produces this report every year and it contains a ton of valuable direct marketing information for businesses and organizations (you can purchase the full 2012 Response Rate Report here). The report provides “key cost and performance benchmarks to help marketers gauge the relative efficiency of their own campaigns.”
Today, we look at some notable data and statistics from the DMA 2012 Response Rate Report along with what those results mean for your organization’s marketing.
1. Direct mail response rates have dropped nearly 25% over the past nine years. Not exactly a surprise since we’ve all heard about the decline of direct mail, but still significant. Perhaps more notable though is – even with the steady decrease in response – mail campaigns still draw a much better overall response than digital channels. DMA offers this example: “response rates for direct mail to an existing customer average 3.40%, compared with 0.12% for email, which is roughly a 30-fold difference.”
2. Email had the highest ROI. According to the report, email earned a 28.5 ROI, compared with 7.00 for direct mail. Email performance improved slightly from the 2010 Response Rate Report, but it’s still nowhere near direct mail response levels. The difference is that email has a much lower cost than direct mail. When you factor in cost with response, email produces the best ROI in the business (though that doesn’t necessarily mean it’s always the best medium to use – more on this below).
3. The highest response rate was produced by telemarketing. Phone produced a response rate of nearly 13% on a house list. This proves the phone remains one of the best ways to connect with people on a one-to-one basis – something direct mail and email just can’t match. On the flipside of that coin, telemarketing also had the highest costs: nearly $78 per order or lead for a house list (and $190 for a prospect list).
4. Cost per order/lead for acquisition campaigns were roughly equivalent for all the channels. The most notable result from the 2012 Response Rate Report may be the fact that, ultimately, the cost for acquiring a lead ended up in the same ballpark no matter what the channel. Direct mail ($51.40), postcard ($54.10), email ($55.24), and paid search ($52.58) all produced comparable numbers in this arena. Hmmmmm…
Here’s a quick primer on the pros and cons of each marketing channel based on the results of the DMA 2012 Response Rate Report:
These results illustrate there is no magic bullet – each direct marketing channel has its unique pros and cons. They also illustrate the importance of multichannel marketing. Since none of the channels provides a perfect solution, it makes sense to mix and match channels for each marketing campaign based on:
(1) who you are trying to reach, and
(2) how much you are willing to spend.
You can use customer data to target customers most likely to respond and coordinate your multichannel marketing efforts accordingly. The idea is to ask yourself how the different channels can be used most effectively to reach your target audience and stay within your budget. By intelligently and strategically employing direct mail, email and telemarketing, you can boost your response rate and maximize your marketing dollars.