Direct Mail Gets Most Response, But Email Has Highest ROI: DMA

Posted on by Larry Riggs

Direct mail may generate the highest response rates of all direct marketing vehicles, but email posts the highest return on investment, according to the Direct Marketing Association’s annual response rate report.

According to the study, response rates for letter-sized direct mail sent to house files was 3.4%, more than 30 times the 0.12% response rate for email. But email’s ROI was 28.5% compared to 7% for direct mail.

Letter-sized mail to prospects got a response rate of 1.28%, while oversized direct mail to house lists got 3.95% response rate, 1.44% to prospect lists. Catalogs got 4. 26% response when sent to house lists and 0.94% to prospect lists; postcards got a 2.47% response rates to house lists, and 1.12% to prospects.

The cost per thousand of business-to-consumer letter mailings was $556 while business-to-business was $919.

Overall, direct mail response rates have fallen 25% over the past nine years, the report said. In 2003, the average house file mailing response rate was 4.37% and 2.14% for prospecting. 

Email to house files had average open rate of 22.05% for a house list, while prospecting email campaigned showed an 11.43% open rate. Conversion rates per click were 1.5% for a house list and 0.4% for a prospect list.

Financial services emails had open rates of more than 30%, followed by publishing and media with an average of 14.9% each, and apparel, with an average rate of 14.7%.

Telemarketing registered highest response rates in the survey with 12.85% for cross selling and 8.21% for prospecting.

The costs per contacts were $10.09 for cross-selling and upselling and $15.64 for prospect calling, while the ROI was 6.5% for campaigns to house files and 1% to prospects.

According to the study, paid search ads averaged a 3.88% click rate and a conversion per click rate of 5.8%. The cost per click on average was $3.05; 50% of respondents used paid search for direct sales and 46% for lead generation.  The ROI was 6.8%.

For online display ads, direct action per click rates averaged 2.51% and clickthrough rates ranged between 0.033% and 0.018%. The average ROI was 10%.

Sample sizes were too small to measure direct response television or mobile marketing response rates, the DMA said.

The survey, based on responses from 481 companies, was conducted in April.

 

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