According to the DMA’s 2012 Response Rate Report the average direct mail response rate was 3.4%. Thats more than 30 times the 0.12% response rate for email. Although direct mail has declined over the past several years, the study proves that it is still an effective marketing vehicle.
Here is a breakdown on responses rates for specific direct response vehicles:
- Letter-sized Direct Mail: 3.40%
- Oversized Mail: 3.95%
- Postcard: 2.47%
- Catalog: 4.26%
- Email: 0.12%
It is also worth noting that email’s ROI was 28.5%, compared to only 7% for direct mail. When taking into consideration the costs associated with direct mail, the costs-per-sale/lead for direct mail and email are about the same.
The report also noted that the average cost-per-order/lead for direct mail campaigns is $51.40.
With all this in mind, and to help wrap your mind around these numbers, I created an example direct mail campaign that used the averages presented in this report…
Now what if we added a PURL?
Let’s take a look at what happens when we add a Personalized URL (PURL) to both the direct mail and email campaigns. Let’s assume that PURLs will increase response rates by 50%. Using the average response rates from the report, we would end up with:
- Letter-sized Direct Mail: 5.1%
- Oversized Mail: 5.92%
- Postcard: 3.70%
- Catalog: 6.39%
- Email: 0.18%
To look at this objectivly, we also need to consider the additional costs associated with adding PURLs to the campaign. PURLs, on average, will increase the cost of a campaign by 10%. With this in mind, we create our example direct mail campaign w/ PURLs.
What does this all mean for you?
By leveraging the higher response rates PURLs provide, it resulted in a 60% increase in profit! ($122/$202) It is true that PURLs add to your campaign’s total costs, but at the end of the day they put more money in your pocket.