Disraeli said, "There are lies, damned lies, and statistics". Direct mail statistics can not so much lie... as mislead.
You'll see many marketers and copywriters crowing about their response rates to direct mail and emails. And while a high response rate is good, it's not the whole story.
Let me explain...
Direct Mail Statistics: The Truth
Your results comprise three elements: your response rate, your conversion rate, and your Return on Investment (ROI). Of these three, the ROI is the most important. Let's take all three in reverse order of their importance and blow away some of the myths.
The Response Rate Revealed
The response rate is just the percentage of people who took the action you asked them to take in your direct mail. If you send 100 letters and get 10 responses, that's a response rate of 10%. Easy. So, what's a good response rate? It depends. Generally speaking, the direct mail statistics for a cold list (i.e. people you have no relationship with), nowadays you can expect maybe between 1% and 3% to respond, depending on your offer.
Best I've had to a cold list was 16%; worst I've had personally is about 2%. Worst I have ever heard of is 0%! To a hot list of your best customers, the sky is the limit. Response rates of 25% or more are common. I managed 57% to a client's in-house list once. That's pretty good.
Why the Conversion Rate is More Important
The next thing to consider is your conversion rate: what percentage of people who responded to your mail became paying customers? This is the second most important of the direct mail statistics you should consider. If your call-to-action in the mail is to buy, then your conversion rate is the same as your response rate. If you are doing just lead-generation, then your conversion rate is likely to be around 90% of the response rate.
It all depends then on your sales process and how effective you and your team are at selling leads who show an interest in you. My best conversion rate was 46% on a £6,000 item -- the same client above where the response rate was 57%. In this case, around 81% of people who responded ended up buying.
ROI - the MOST Important Thing to Consider
But daddy of them all is your Return on Investment. Some marketers might feel very glum at getting only a 0.000001% conversion to a mailing... but if this is a mailing selling £10 million yachts... then how have you done? This is where the direct mail statistics can be misleading, as you you'll see. Because imagine you spend £5 per letter and you send 10 million of them. The mailing has cost you £50 million. But... you then go on to sell 10 yachts... for £100 million in total.
Holy cow... that's a £25 million profit, if we assume 100% markup on the yachts. Nice work if you can get it, I'd say. Wouldn't you?
So don't be too easily impressed or fooled by marketers and copywriters bragging about their stats. The most important thing is the ROI.
Lead generation and direct response marketing specialist and copywriter Jon McCulloch is the author of " BIG Marketing Muscle for Small Business ".
This book reveals the strategies he has used with his clients to realise response rates over 300% better than traditional techniques... and for a limited time you can download 'BIG marketing Muscle for Small Business' right now. His clients have mailed over 1 million pieces using the exact same strategies he reveals in this book - so you know they're tried, tested and proven to work in the real world.
Article Source: http://EzineArticles.com/?expert=Jon_Mcculloch
You'll see many marketers and copywriters crowing about their response rates to direct mail and emails. And while a high response rate is good, it's not the whole story.
Let me explain...
Direct Mail Statistics: The Truth
Your results comprise three elements: your response rate, your conversion rate, and your Return on Investment (ROI). Of these three, the ROI is the most important. Let's take all three in reverse order of their importance and blow away some of the myths.
The Response Rate Revealed
The response rate is just the percentage of people who took the action you asked them to take in your direct mail. If you send 100 letters and get 10 responses, that's a response rate of 10%. Easy. So, what's a good response rate? It depends. Generally speaking, the direct mail statistics for a cold list (i.e. people you have no relationship with), nowadays you can expect maybe between 1% and 3% to respond, depending on your offer.
Best I've had to a cold list was 16%; worst I've had personally is about 2%. Worst I have ever heard of is 0%! To a hot list of your best customers, the sky is the limit. Response rates of 25% or more are common. I managed 57% to a client's in-house list once. That's pretty good.
Why the Conversion Rate is More Important
The next thing to consider is your conversion rate: what percentage of people who responded to your mail became paying customers? This is the second most important of the direct mail statistics you should consider. If your call-to-action in the mail is to buy, then your conversion rate is the same as your response rate. If you are doing just lead-generation, then your conversion rate is likely to be around 90% of the response rate.
It all depends then on your sales process and how effective you and your team are at selling leads who show an interest in you. My best conversion rate was 46% on a £6,000 item -- the same client above where the response rate was 57%. In this case, around 81% of people who responded ended up buying.
ROI - the MOST Important Thing to Consider
But daddy of them all is your Return on Investment. Some marketers might feel very glum at getting only a 0.000001% conversion to a mailing... but if this is a mailing selling £10 million yachts... then how have you done? This is where the direct mail statistics can be misleading, as you you'll see. Because imagine you spend £5 per letter and you send 10 million of them. The mailing has cost you £50 million. But... you then go on to sell 10 yachts... for £100 million in total.
Holy cow... that's a £25 million profit, if we assume 100% markup on the yachts. Nice work if you can get it, I'd say. Wouldn't you?
So don't be too easily impressed or fooled by marketers and copywriters bragging about their stats. The most important thing is the ROI.
Lead generation and direct response marketing specialist and copywriter Jon McCulloch is the author of " BIG Marketing Muscle for Small Business ".
This book reveals the strategies he has used with his clients to realise response rates over 300% better than traditional techniques... and for a limited time you can download 'BIG marketing Muscle for Small Business' right now. His clients have mailed over 1 million pieces using the exact same strategies he reveals in this book - so you know they're tried, tested and proven to work in the real world.
Article Source: http://EzineArticles.com/?expert=Jon_Mcculloch
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