|Response rates in direct mail
In recent years Hamilton House has done a lot of research on how to get the best response rates in direct mail. If you click on average you will find information on the kind of response rates that we have seen in the past. For information on the factors that affect those response rates and how to improve them, please click on higher.
Average response rates
I am regularly asked for information on the average response one can get to a mailshot, but sadly it is impossible to give an answer to this. Instead here are some sample responses I have managed to get. In what follows, “mailed cold” means mailed to a list of people who might be expected to reply – not to previous customers or people who have expressed an interest before.
These totals represent my best achievements in each category. But there have been many where I have achieved nothing like this – which is why experimentation is always worthwhile.
Selling a report costing £49 mailed cold – 6%
Selling a report costing £25 mailed cold – 11.5%
Giving away a report mailed cold – 31%
Giving away a report mailed to past customers – 22%
By way of comparison you might wish to note that the highest response rate we have ever had selling the same products cold, via email, is 1.1% While email lists can be a lot cheaper to mail, it is hard to build up much of a business, because the number of people who will reply is so small.
One interesting thing is that we have had more applicants for a report on a cold mailing than when mailed to past customers. The most likely reason is that many of the past customers either had the piece already, or thought they had it, or didn’t feel they needed it because they had read another report of ours.
It would be a huge mistake however to look at the figures above and say – “they got 11.5%, so we ought to be able to get at least 8%.” These are the highest results I achieved.
If you want to know the worst figures achieved in these categories the answer is simple – 0% all the way through. Fortunately that has never worried me too much nor cost me too much money because I always experiment, and the 0% results were achieved with very small sample mailings.
Perhaps more to the point is the fact that tiny changes in mailings can make huge differences. One of my zero percent returns for a report costing £49, turned into a 2% response when I changed two sentences. Zero percent was of course a loss maker. 2% turned out to be very profitable.
This leads to the final point. Before you mail you must know what sort of response rate you need to achieve to get a good result. It will, naturally vary enormously. At the moment I am involved in selling a course. When mailing cold a profit is made if the response rate is 0.2%. To spell that out, the profit starts when two people in every thousand mailed sign up for the course.
On the other hand when First and Best, the book publishing company within the Hamilton House group mails details of a new title to a cold list, it needs 2.5% to make a modest profit.
If you undertake your opening calculations and find that just to break even you need a response rate of over 3% I would start exercising caution. It can be done – but it is likely to be a struggle. My strong advice would be to mail only a few hundred addresses to see if you are going to achieve the levels you need.
Higher response rates
The two factors which can have a profound effect on your response rates are text and design.
The way you write your direct mail has a profound effect on the response rate you will get.
In the section on Average Response Rates I pointed out a situation in which the addition of two sentences gave a profitable response where nothing had been received before. This was not a one-off. In 2005 I was asked to revise a sales letter for some software – a sales letter that had previously been generating perhaps £25,000 each time it was mailed out. By undertaking a total re-write I multiplied the income ten fold.
Such huge increases are unusual, but doubling response rates can certainly be achieved through changing the text – although you might well have to give it several tries before you get it right. There is a lot of information on this subject – including what text works and what does not, and the factors affecting response rates, on www.mailing.org.uk
If you have written the text of a mailshot and would like to have an opinion on how it might be changed to get a much higher response rate please send it to Creative@hamilton-house.com or if you would like to talk the matter through please call 01536 399 000 and ask for the Creative Team.
Just as copy can affect your response rates, so can the way you use design. The simple rule of design in direct mail is that it should never interfere with the copy or with the message – it should enhance the copy and the message.
This may sound obvious, but it is amazing how often people get it wrong. To get the balance of copy and design right you need to appreciate a little about the psychology of perception and the way in which the eye and mind work on a sheet of paper. This simple point is that design can either enhance or interfere with the copy, and since it is the copy that does the actual selling it is important there should be no interference.
Again, there is more on this subject on www.mailing.org.uk