I could tell you that the average temperature in the world is 60
degrees Fahrenheit. But that fact wouldn’t keep you from getting
sunstroke in Cairo. Or frostbite in Tuktoyaktuk. Averages tell
you only so much.
Direct mail results only tell you part of what you need to know.
They tell you the percentage of people on your list who
responded. That’s it. They don’t tell you if you broke even. If
you made a profit. Or if the sales people who followed up on the
leads closed any sales.
Response rates are misleading if you read them incorrectly. For
example, I recently wrote a fundraising package for a North
American nonprofit. The letter, mailed to a list of 6,850
donors, generated 35 gifts (responses). Run the numbers and
that’s a response rate of half of one percent, a dismal result.
But this number is misleading because my client (against my
recommendation), mailed the letter to everyone donor in his
database, including lapsed donors who had not made a donation
for years.
So I asked my client how many active donors he had in his
database. Two hundred, he replied. That’s 200 active donors out
of a list of 6,850 total donors. Run the numbers again, and
you’ll see that my letter generated a 17.5% response rate when
mailed to active donors, or, to put it another way, when mailed
to a good list.
Another problem with response rates, valid as they are, is that
you cannot use them for every industry. Take the Olympic Games.
When a nation applies to the International Olympic Committee,
requesting that the Olympic Games be held in their capital city,
they need a 100% response rate to succeed. They need one
“client” to buy their proposal or their mailing has failed.
Take a magazine publisher. It mails to 500,000 names, generates
only a 1% response rate, yet considers the mailing a success.
But a stock. broker who targets wealthy doctors in Lower
Manhattan has different expectations. His lead generation letter
needs to generate a response rate of at least 25% because he
only mails it to 100 doctors, and he only closes around one in
every 25 doctors who responds. A one percent response rate, even
if it is an average, is of no use to him.
Average response rates are useful when they are for your product
or service and your target audience in particular. If you can
discover the response rates that your competitors are generating
by mailing sales letters to the same prospects that you are
targeting, then, by all means, use those response rates as a
yardstick against which you compare your results. You are
talking specifics.
Some response rates for various industries.
The Direct Marketing Association (www.the-dma.org/ calculated
the average response rates for a number of industries:
Fundraising: 5.35% Retail: 3.36% Businesses selling services to
businesses 3.34% Manufacturing: 3.17% Personal and repair
services 3.07% Travel 2.98% Computer/electronics: 2% Packaged
goods: 2%
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