Data on current direct mail response rates is one of the most popular topics on our blog, and for good reason, as companies look to get the most out of their marketing dollar. We’re happy to report the Direct Marketing Association recently made its 2015 DMA Response Rate Report available (fees apply), and it shows the response rate of direct mail outperforms all digital channels.
This year’s report includes a lot of positive information regarding direct mail, including high response rates, its value in integrated campaigns and an attractive cost per acquisition. It wasn’t all good news for direct mail, however, as overall usage was down. But even that wasn’t all bad as 82% of respondents expect to use the same amount of direct mail, or more, in the coming year. Let’s jump into some of the key takeaways for direct mail (the good, not-so-good or otherwise) from the 2015 DMA Response Rate Report:
The Good News
- Direct mail response rates outperform digital channels by a long shot. Direct mail achieves a 3.7% response rate with a house list, and a 1.0% response rate with a prospect list. All digital channels combined only achieve a 0.62% response rate (Mobile 0.2%; Email 0.1% for a Prospect list and 0.1% for House/Total list; Social Media 0.1%; Paid Search 0.1%; Display Advertising 0.02%). Telephone had the highest response rate at 9-10%.
- Cost-per-acquisition for direct mail is very competitive. Direct mail stands at $19, which fares favorably with Mobile and Social Media (both at $16-18), Paid Search ($21-30), Internet Display ($41-50) and even email ($11-15).
- 82% of respondents expect to use the same amount of direct mail, or more, in the coming year.
- Formats are playing a role. According to the study, oversized envelopes have the best response rate at 5.0%, followed by postcards at 4.25%, dimensional 4.0%, catalogs 3.9% and letter-sized envelopes 3.5%.
- Marketers continue to embrace multi-channel marketing, with 44% of the respondents using three or more channels for their marketing efforts. In these instances, the most popular channels tend to be email, direct mail and social media.
- Direct mail offers strong return on marketing investment. It returns the same ROI as social media (15-17%).
The Not-So-Good News
- According to the study, the main challenges with direct mail are the cost, the effort to deploy it and the difficulty of tracking it. We’ve written extensively about the need for the Postal Service to keep postage affordable, most recently in our thoughts for the new Postmaster General, Megan Brennan. We hope they are listening, as keeping the price of direct mail competitive is crucial to marketers, service providers and consumers alike.
- Direct mail usage is down, with just half of respondents reporting they use the channel.
The Not-So-Good News That is Actually Good News
- The feedback on the difficulty with tracking direct mail was painful and puzzling to read. We’ve written at length about ways to track direct mail ROMI. If you’re having trouble tracking the results of your direct mail campaign, this suggests there may be flaws in the strategy or analysis. If you’re experiencing these difficulties, the good news is we can help. Get in touch with us. We’d be happy to get your campaign strategy and analysis on track.
- While fewer companies reported using direct mail, that can be very good news for those who do, as there is less competition in the mailbox for your prospects’ attention.
The 2015 DMA Response Rate report includes a lot of information that can be hard to wrap your mind around. But to summarize, the key findings are that direct mail continues to be a very strong and successful channel, both in terms of response rates and cost-per-acquisition. It may be more expensive on a “per piece” basis than digital channels, but it packs a punch that cannot be replicated with a digital channel alone. However we’re not advocating an either-or approach. We know that direct mail powers integrated direct marketing campaigns and using direct mail strategically will provide the return on marketing investment (ROMI) you are looking for. That’s why full-service marketing that incorporates everything from data to analysis is so crucial to the success of any direct marketing campaign, and that’s why we created our Proprietary Intelligence model.