What Kind of Response Rate Can We Expect?

If you have been in the direct marketing business for long, then it is certain that your manager, client or colleague has asked you this question. Most direct marketers consider this an unanswerable question without knowing the results from previous tests for a specific offer to a specific mailing list.

If truth be known, DM pros think this unanswerable question about response rates comes only from inexperienced direct marketers. But is this true?

You would think that after looking at the results from hundreds of multi-channel campaigns in dozens of industries. a direct marketing veteran should be able to answer this question by stipulating certain caveats.

And let’s be real here. How can you judge whether a test of a certain offer to a certain audience should be implemented without first determining that you have a good chance of achieving the required response rate?

So let me share some response rate guidelines to get the conversation going.

Here’s what I use as benchmarks to evaluate the feasibility of testing a product, price or offer in acquisition efforts.

 For other channels such as broadcast, the feasibility is determined mostly by the allowable Cost Per Lead (CPL). Most broadcast CPLs range between $25 to $35 per lead. As the allowable CPL decreases, DRTV circulation drops dramatically eliminating the channel as a marketing opportunity. The resulting sales volume is no longer worth the effort.

Please provide some of your thoughts and experiences with response rates. What other industry benchmarks do you use? How far off am I based on your experience?


Posted on October 31, 2007 and filed under Direct Marketing Strategy.