Response rates to a targeted marketing campaign should not be regarded as the only measure of its success or failure. Yet an analysis of enquiries to the Direct Mail Information Service over the past five years shows that average response rates are one of the most frequently requested pieces of information.
The past five years’ figures reveal some interesting trends. To begin with, the size of direct mail campaigns has fallen. On average, each direct mail campaign between 1991 and 1994 involved 1.6 million items. In 1995, however, according to a Marketing Week survey carried out in conjunction with the DMIS, direct mail campaigns involved an average of 707,000 items.
The survey canvassed the views of Marketing Week readers, and their response reflects the growing use of more sophisticated targeting techniques to segment potential markets.
This trend has also had a significant impact on costs. In the period 1991 to 1994, the average cost per response to a direct mail campaign was 51, with the average cost per item 39p. But in 1995, the average cost per item increased by 50 per cent to 59p, but the average cost per response dropped from 51 to 37.
The survey also shows a divergence in response rates between campaigns targeting business people and those aimed at consumers. In 1995, the response rate for consumer mailings was 6.1 per cent, while the response rate for business mailings was 3.9 per cent. Response rates in both areas appear to have fallen, with the respective percentages for 1991 to 1994 being 6.5 per cent and 4.4 per cent.
But it should be noted that this could in part be due to the larger sample size provided by Marketing Week readers and a different profile of respondents from the magazines that the DMIS has previously worked with.
The average response rate to other direct marketing techniques is far smaller. Door-drops aimed at consumers achieved a 1.8 per cent response, while those at businesses received 0.1 per cent.
Responsive consumer press advertising managed 0.4 per cent, and that aimed at businesses 0.2 per cent. Inserts targeting consumers notched up 0.9 per cent and businesses achieved 1.6 per cent.
Because the number of solus campaigns for unaddressed door-drops, responsive press advertising and inserts is so small compared with the sample for direct mail, the base sizes do not allow for deeper analysis – except in the area of satisfaction with results.
Those clients who used direct mail were the most pleased, with 54 per cent of those who exceeded their targets being satisfied and only one per cent being unhappy. Press advertising came next, with 45 per cent being satisfied, followed by inserts with 42 per cent and door-drops satisfying 38 per cent.
Among clients who did not exceed their targets, dissatisfaction was highest with press advertising at 32 per cent and with door-drops at 31 per cent.
While the average response rate for all the direct mail campaigns on the DMIS database is 6.2 per cent, 47 campaigns managed to achieve rates of 40 per cent or more, with another two that combined direct mail with press or inserts also getting 40 per cent or better.
Nearly half (48 per cent) of the high-scoring campaigns were consumer, with slightly less (46 per cent) being business and five per cent both. All of them involved using an existing customer list, sometimes in combination with rented or prospect lists.
The type of response requested has a significant impact on the rates achieved, it seems. An analysis of the high-response campaigns against all direct mail programmes shows that twice as many high-response campaigns featured a prize draw, while nearly five times as many involved consumers filling in a questionnaire. The high-response campaigns were far less likely to want consumers to respond for further information.
On average, across the entire DMIS database, the mailshots that won the highest levels of response were those that asked consumers to fill in a questionnaire of some sort (20.9 per cent). Next were those that included a coupon or voucher (14.8 per cent), followed by prize draws (12 per cent) and free events (11.5 per cent). The lowest response (6.4 per cent) was to those mailings that gave the recipients the option of asking for a company representative to visit them.
The most active users of direct marketing over the past five years have been business services marketers, with 141 campaigns. They have also achieved some of the highest response rates, at 20.1 per cent.
Computer marketers are the second most active users, accounting for 77 campaigns in total, but with a far lower response rate of 6.3 per cent. Significantly, the 1995 sample provided 36 computer campaigns – almost equal to the total for the previous four years – which suggests that the use of direct mail by the computer industry is increasing enormously.
Other industry sectors that have achieved high response rates – that is, more than 20 per cent – include consumer services (33 campaigns with 22 per cent response); food and drink (32 campaigns with 21 per cent response); and leisure activities (15 campaigns with 22.2 per cent response).
How the Survey was compiled
Although the DMIS has been running a response rate survey for a number of years, the response it received from the insertion of a questionnaire in Marketing Week was its highest ever. Just under 200 readers, responsible for a total of 427 direct marketing campaigns, responded.
The total number of solus campaigns (those using only one medium or technique) that the DMIS database now has information about (covering the past five years) is 1,255. In total, counting campaigns that combine techniques, the DMIS database covers 1,451 drives.
The 427 campaigns covered by the 1995 Marketing Week sample represent a total of 109 million items of direct mail, 14 million unaddressed items, a total circulation of 14 million for responsive press advertising and 7 million items inserted in magazines or newspapers. As the survey took place in October, the most recent results were for campaigns mailed in September or very early in October.
A third of the campaigns took place in September or August, with another third happening between April and July. Most of the remainder were from the six months between October 1994 and March 1995, with a scattering from earlier in 1994 and two from 1993.
To check the data quality, the results of the survey are compared with independent sources of data, namely the RSGB mail monitor survey (a panel of consumers who report their actions regarding direct mail, among other things) and other DMIS surveys of what consumer and business recipients claim to have done with their direct mail.
Previous surveys have only covered direct mail. Since this is the first survey to enquire about other forms of targeted marketing, sample sizes for these are very small and the data that can be extracted from them is relatively restricted. In future years, the DMIS hopes to expand the database covering inserts, responsive advertising and other direct mail techniques to build a similar information resource to that for mailings.
Of the 427 campaigns conducted by Marketing Week readers, a total of 315 used direct mail, 41 used door drops, 71 used press and 52 used inserts. A quick bit of maths shows that the total comes to considerably more than 427: this is because a number of campaigns combined two or three techniques.
Solus use was as follows: direct mail, 278; door-drops, 29; press advertising, 47; inserts, 31.
The number of campaigns that combined two techniques was: mail/door-drop six; mail/press 12; mail/insert 10; door-drop/press two; door-drop/insert two. Eight campaigns used a combination of mail, press and inserts, with one each using a combination of mail, door-drop and press and door-drop, press and inserts.
Most analysis of the data has been conducted on the solus campaigns. As the database gets bigger, analysis of combined media campaigns should become more accurate.