DMA Response Rate Report w/ PURLs

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…

Example Direct Mail Campaign:
Sent to 1,000 people
Cost per order: $51.40
3.4% of people respond =  34 people
34 people * 51.40 = $1747.6 Campaign costs
7% ROI = $122 Profit

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.

Example Direct Mail Campaign w/ PURLs:
Sent to 1,000 people
Cost per order: $56.54 ($51.40 * 110%)
5.1% of people respond =  51 people
51 people * 56.54 = $2883.54 Campaign costs
7% ROI = $202 Profit

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.

 

  • CrossMedia Marcom

    When all other numbers in the DMA report are statistically proven, why are you using a “guess” when it comes to adding a PURL to the campaign. Why didn’t you say 25% or why not 100% increase? Do you have statistical references across many campaigns, industries to back up the 50% number? I’d like to use your example, but I fear that will be the crowning question.

    Thanks!

  • http://twitter.com/purlem Martin Thomas

    Hi Marcom.. I have a link to a case study that split tested PURL vs. No-PURL here: http://www.purlem.com/blog/2012/06/miami-university-uses-purls-to-increase-response-by-1466/

    However, the results from this campaign are so outstanding, I don’t think it should be used as a benchmark for others. I have seen PURLs increase response by 0%, and by 1000%. Reason is that PURLs are only a tactic that depends on a successful campaign to really succeed. I address some of that here: http://www.purlem.com/blog/2012/06/what-will-my-response-rate-be/

    The 50% increase seems to be used as an “industry standard” as mentioned in PURLs for Profit: http://bookstore.napco.com/pi/index.cfm?fua=shop&fa=bookDetail&id=376

    Hopefully that helps…

  • CrossMedia Marcom

    Thanks Martin. I’m very familiar with the “more successful campaigns” folks have posted up as “examples.” I have been selling the use of pseudo PURLS, back before we called them PURLS, we were doing custom offers on landing pages using codes on mailers. The MindFire folks were some of my original relationships back in the early Printable days.

    The report you’re pointing me to has to be purchased to see the data you’re describing. Would you be able to screen shot some of the data your referring to in that report and send to me? I appreciate it greatly. Your approach to this opportunity is right on, and I want to continue to expound on the value of PURLS – I’m sure you’ve also looked at social integration and pollination of PURLS – have you any bits on that subject?

  • http://twitter.com/purlem Martin Thomas

    Ya.. I took some screen shots of the intro to this study. On the last page Ethan Boldt says: “PURLs typically increase response rates by 50 to 100 percent”

    http://www.purlem.com/blog/wp-content/uploads//2012/07/1.png
    http://www.purlem.com/blog/wp-content/uploads//2012/07/2.png
    http://www.purlem.com/blog/wp-content/uploads//2012/07/3.png

  • http://twitter.com/purlem Martin Thomas

    Oh.. and no, I have not written much on social integration w/ PURLs. Have you found any good resources on this topic?

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