A few weeks ago we analyzed the Direct Marketing Association’s (DMA) 2012 Response Rate Report – specifically direct mail and its performance in terms of response rate and cost per order or lead. As promised, we’re back to review the performance of other direct marketing channels included in the report such as email, telephone, paid search and online display advertising. Here are the facts:
- Telephone has the highest overall response rate, but it’s also very expensive. Telephone’s response rate stands at 12.95% for calls directed toward a house list and 8.21% for calls directed toward the general public or a prospect list. But at $77.91 per lead, the cost of house-list telephone marketing is nearly four times more expensive than direct mail ($19.35). The ratio is similar for the general public or a prospect list at $190.49 vs. $51.40.
- Email has a low response rate and an average cost per lead. Email response stands at 0.12% to a house list and 0.03% to the general public or a prospect list. Its cost per order or lead is $55.24, which falls in line with other channels such as direct mail ($51.40) and paid search ($52.58).
- Online display advertising and paid search have lower response rates than email. According to the study, online display advertising has the lowest overall response rate at 0.04%. At 0.22%, paid search shows the highest response of all three e-channels (email, online display advertising and paid search). Both display advertising and paid search were only measured to the general public or a prospect list.
- Online display advertising has the second highest cost per lead, while paid search is average. At $138, online display advertising is second in cost per order or lead behind telephone. Paid search has an average cost per order or lead of $52.58, which is slightly lower than email ($55.24).
So what does all this mean? As marketers, it’s important to choose the approach (and channels) which your customers and prospects prefer. And as ExactTarget’s 2012 Channel Preference Survey suggests, the channel consumers prefer to communicate with friends may not be the same way they want to communicate with brands. Direct mail not only has strong overall numbers, it’s a great way to get consumers’ attention and invite them to visit your other channels. Our experience shows that once the initial connection is made through direct mail, the response rates and overall effectiveness of those other channels follow suit.
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