What Is the Average Direct Mail Response Rate?

Key Takeaways

• There isn’t a universal average direct mail response rate that is considered to be “good” for every direct mail campaign.
• There are several factors that go into what its response rate will be, such as its audience, mailing list, offer, campaign objective, and industry.
• House files and other customer lists are going to provide a different average direct mail response rate than a prospect list.
• A high response rate doesn’t mean that a campaign was successful, there are other metrics that need to be taken into consideration as well.

Introduction

You’ve launched your direct mail campaign and, after the results were calculated, you have a 3% response rate. What does that mean, is that good? Is it bad? Is it somewhere in the middle? The answer is that you can’t tell off that 3% response rate alone. While it’s natural to want to immediately know the result of your campaign, response rates vary from one campaign to the next.

What Is a Direct Mail Response Rate?

A direct mail response rate measures the total number of responses that were generated relative to the number of mail pieces that were sent. The formula for your response rate is equal to the number of responses divided by the number of mail pieces sent, then multiplied by 100 since the response rate is a percentage. For a more detailed explanation, read Geon’s article on “What is a Direct Mail Response Rate” here.

What Is the Average Direct Mail Response Rate?

It’s tricky to give a definitive number for what the average direct mail response rate is. Industry standards often show that the average response rate is in the low single digits overall, but benchmarks that you’ll find all vary depending on how a response was defined, audience, list type, industry, and campaign type.

Source

While these numbers can be used as a reference point if needed, these numbers should not be predictions of what your response rate will be with your direct mail campaign.

Why Do Average Direct Mail Response Rates Vary?

Mailing List/Audience

Are you reaching the correct group of people who are most likely to be interested in you and your product?

Relationship With the Recipient

A consumer base with a preexisting relationship with your company could respond differently when compared to cold prospects who have never interacted with your business.

Offer

Do you have a compelling offer? Did you give the recipient of your mail piece a reason to respond to it?

Creative/Format of the Mail Piece

Did your mail piece stick out enough to look interesting for your mail piece’s recipient, or did it blend in with the rest of the mail that they received?

Timing

Did your offer reach its recipient at a relevant time?

Industry/Product

Depending on your industry, your mail piece might have a different response rate than a different industry. A coffee shop sending a 20% off coupon could have a different response rate than a carpet cleaning company attracting new clientele.

What Your Definition of a “Response” Is

When you’re comparing average direct mail response rates between different campaigns, make sure that you understand how a response was defined in the campaigns. A QR scan and a completed consultation request measure very different levels of engagement, and thus response rates.

House Files vs. Prospect Lists

A house file is a file of individuals who already have a relationship with your company, be they prospects, customers, inquirers, etc. A prospect list is what you generally think of when you think of renting a direct mail list for a campaign. Due to the names in your house file containing people with a preexisting relationship with your company, house files generally outperform prospect lists when it comes to average direct mail response rates. For more information, read Geon’s article on house files here.

Is a Higher Average Direct Mail Response Rate Always Better?

No, a campaign with a higher average direct mail higher response rate doesn’t mean that a campaign was more or less successful than a campaign with a lower response rate. For example, I have two campaigns:

Campaign A

10,000 pieces mailed

10% response rate = 1,000 responses

100 became customers

Campaign B

10,000 mailed

5% response rate = 500 responses

250 became customers

If you’re looking purely at response rate, then Campaign A would be deemed to be the more successful campaign. However, as you can see, Campaign B generated more than twice the number of new customers as Campaign A. So, which of these two campaigns was the most successful? Even with this information, it can’t be determined. Questions still remain, such as:

• How much did each campaign cost compared to the revenue generated?
• How much revenue did these customers generate?
• What’s the lifetime value of these customers?
• What was my conversion rate?

Asking these questions and more can help to determine which campaign performed better.

What Is a Good Average Direct Mail Response Rate for My Campaign?

A good average direct mail response rate for your campaign is the rate at which your campaign accomplishes what it needs to while costing an acceptable amount of money. Suppose that you have your previous three campaign’s response rates being 3.1%, 3.3%, and 3.4%. Those results might provide a more useful context for when it comes time to evaluate your next campaign than an article online that you find that tells you that a 5% response rate it “good”.

However, you should also look at the type of campaign that you’re running. If your campaign’s primary goal is to build brand awareness rather than generating an immediate action, then response rate might not be the most useful metric for judging whether your campaign has achieved its objective.

How Can I Improve My Average Direct Mail Response Rate?

There are several ways that you can improve your average direct mail response rate. Some of the areas that you can look to improve upon include:

• Mailing list/audience
• Quality of the mailing list
• Creative
• Offer
• Call to action
• Timing
• Response mechanism chosen

You can also look at conducting an A/B test, which is where the only main variables that you’re testing are limited so you can see which mail piece performs better. For more information on A/B tests, read Geon’s article here.

If you improve your response rate and other metrics, that is just one piece of the bigger puzzle of improving your future direct mail campaigns.

FAQ

• Q: What is a good average direct mail response rate?
  • A: There isn’t one “good” response rate that is a benchmark for every direct mail campaign. Previous campaign results can provide context if you have them, but results vary based on variables such as your mailing list, target audience, industry, product, campaign objective, and more.
• Q: Why do house files do better than prospect lists?
  • A: House files and customer lists generally perform better due to the preexisting relationship or familiarity that those individuals have with your company.
• Q: Is a 1% response rate bad? Is a 10% response rate good?
  • A: Based off of those numbers alone, it cannot be said whether one is good or if one is bad. Other metrics should be looked at alongside those numbers to determine if those response rates are good or bad.
• Q: How can I increase my direct mail response rate?
  • A: There are several ways that you can increase your direct mail response rate. A few areas that you could consider include how to improve your customer targeting, offer, creative, call to action, timing, and/or your response mechanism.

Conclusion

There isn’t a universal response rate that can determine whether a direct mail campaign has been a success or a failure. Your audience, mailing list, offer, campaign objective, and other variables can all have an impact on the response rate that your direct mail campaign generates. Industry averages can provide some context, but they shouldn’t be seen or treated as the universal standard for deciding whether a campaign has succeeded or not. Rather than judging a direct mail campaign solely on the response rate that you’ve received, evaluate your response rate along with metrics, such as your conversion rate, return on investment, and other metrics, as these can help better determine how your campaign performed.

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