What’s the real rate of return on a direct mailing?

Sept. 17, 2014

You can calculate the return for a direct mail campaign by multiplying the four key elements: Sale price, number of mailings, response rate and conversion rate.

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 — everything depends on the mailing list, the creative copy, the offer and the timing of the mailer.

They normally say to me next that they have heard they should get a two percent response on their mailing. Truth be told, half a percent to two 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 return for a direct mail 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’s success and help a mailer calculate their actual return rate and ROI.

There are sites online where a direct mailer can go to calculate direct mail ROI (just type that into the search engine 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 begin. 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.

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