What’s a realistic expectation for your mailing campaign response rate?

I am proud to say I have done mailing campaigns with a 10% response rate.  I know other business people who routinely expect a 5% mailing campaign response rate.  Amazingly, though, bulk mailers can make profits on much, much lower response rates.  But I caution you… low response rate campaigns can be extremely costly to test and perfect.  You’re living on the razor’s edge!

What’s the point of your direct mailing campaign?

When you’re about to make an investment in a major marketing campaign, it’s usually for one reason only: You hope to get responses that will drive business, and eventually profits, back to you.

However, mailing campaigns, and whether they are a cost effective and successful marketing strategy all comes down to numbers.  If you have a profitable mailing campaign, you can scale it up and make thousands of dollars selling products or services.  If you have a bad campaign, it can eat through your wallet like a moth locked away with your favorite wool sweater.

Before embarking on this type of potentially expensive investment, it’s a good idea to ask – how much will this cost and what can I expect to get out of it… basically:  "What is the mailing campaign response rate I should be looking for?"

The Big Boys Make Money On LOW Mailing Campaign Response Rates

Disappointingly, many professional marketers expect no more than a 1-2% response rate at most from their direct mailing campaigns.  Nationwide bulk mailers – the type that send you credit card offers and coupons in the mail, generally make their profits on a .5% response rate or less.

The key there is doing everything in bulk so your costs are as low as possible and having a high-enough profit margin in your service that when you DO get a hit off of your mailing, it pays for the other 200+ mailers that were sent out and did not receive a reply.

There are a number of important factors to consider in gauging what type of mailing campaign response rate you can expect with your next mailing campaign.

Click here to read Three Things To Know To Get The Best ROI On Your Direct Mail Campaign.

Calculate Your ROI On Your Mailing Campaign

When it comes to planning a campaign of your own, you must know the value of a new customer. 

Here’s a quick example:

For example, if you are selling a consulting service such as financial planning and most new clients come on board with a 2-hour consult and quarterly update meetings, you could estimate that you’ll get $500 in business in the first year from any new client acquired. 

Then you have to subtract the costs of delivering that service.  Subtract the costs of your lease, the staff’s salaries, and the value of your own time.  Let’s say you have a 30% profit margin, so you would expect to PROFIT $150 for delivering that service to that client.

So, presumably, you could spend UP TO $150 to acquire a new customer and still break even in your first year.  Any additional revenue from that client for future years of service, referrals, etc. will be gravy (although if you know the lifetime value of your clients, even better!).

How much does it cost to acquire this client?  That’s the big question that you need to look at and test with your marketing campaigns.  If you haven’t already, pick up a copy of my ebook on successful marketing campaigns and swipe the exact letters that have been working for salesmen and consultants across the country in a variety of different industries.  It’s yours now, here, free.

You could send 4 mailings to a very targeted list of 100 prospects and pick up 5 new clients.  Likewise, you could send a mailing to 1000 prospects and pick up no clients.  Using proven and tested marketing campaigns is the way to go here.

If you’re currently doing mailings, make sure you’re keeping track of the annual cost of your mail pieces and postage and that you’re TRACKING your incoming clients to see what type of advertising has driven them to your business.

That’s the only way to know what your current direct mailing campaign’s response rate is and whether you’re in the red or the black when it comes to paying the postman.

No related posts.

Proven Marketing Campaigns