What’s the Real Rate of Return on a Direct Mailing?

Every day, people ask me about the average response from a direct mailing.

And, I typically answer this question the same way each time, explaining (patiently) that there is no average response – that everything depends on the mailing list, the creative, the offer and the timing of the mailer

They normally say to me next that they have heard they should get a 2% response on their mailing. Truth be told, ½ of a percent to 2 percent is a better guess. But we all know, there are a lot of variables out there that help us define success.

You can calculate the direct mail return for a campaign by multiplying the four key elements: sale price, number of mailings, response rate and conversion rate.
The response rate is the number of people who respond to an ad; the conversion rate is the number of people who make a purchase. Both the response and the conversion are important indicators of a direct mail campaign success and help a mailer calculate their actual Return Rate and ROI.

There are sites on-line where a direct mailer can go to calculate their direct mail return / ROI (just type that into Google and you’ll get a myriad of sites you can click into.) If you actually plug in your numbers, you can check the feasibility of a campaign before you even start. It’s a good place to start.

But let’s go back to the original question, which was “What’s the Real Rate of Return on a Direct Mailing?” Bottom line, that’s the wrong question. Instead, the question people should be asking themselves is “Did I make more money than I spent on this direct mail campaign and what did I learn from it?”

That’s the Real Return.