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How mail stacks up as a response medium
Judging the success of any advertising campaign comes down to three simple words: did it work? In mail marketing this means did people respond? If so, how many?
How many people redeemed their coupons or booked their cars in for service? You can measure effectiveness in terms of response per size of mailshot: how many people reacted to the campaign compared to the number who received it? This is called the response rate.
Know what kind of response to expect
Average response rates for consumer mailshots are about seven per cent. For business to business mailshots they stand at 6.4 per cent. Door drops get, on average, a five per cent response rate.
If your campaign achieves these levels consider it a success.
Make sure you can cope with the responses (unless you're a charity raising money!). Imagine you're mailing 5,000 people with details of your new hairdressing salon, and you got a 75 per cent response. Could you actually cope with 3,750 people arriving on a Saturday? Probably not. You would even be far pushed to deal with that many bookings over the phone. The danger is disappointing more people than you can actually satisfy.
It may seem odd that apparently "low" response rates are seen as successes, but it is all to do with capacity to handle sales, and an acceptance of natural wastage: as Lord Leverholm once famously observed: "I know half of may advertising budget is wasted, the trouble is I don't know which half".
Response rates for different media
Looking at effectiveness on other advertising media will give a good idea as to how responsive a medium mail really is. Naturally the effectiveness of different media will vary according to the product or service advertised, but the figures below give an approximate media against media comparison of response rates.
| Medium | Size/format | Responses per 1000 |
|---|
| 10cm x 2 cols | 0.1 | | 20 seconds | 0.5 | | Full colour page | 1.0 | | Page with tipped-on card | 2.5 | | Loose insert | 5 | | Multi-piece format | 25 | | Multi-piece format | 40 | | Multi-piece format | 125 | | Multi-piece + outbound telemarketing | 400 |
Cost per response
Of course, cost is the other factor you need to take into consideration when judging effectiveness. If mailing active customers and following up with a phone call really is 4,000 times more effective than placing a 10cm x 2 column ad in a newspaper - make sure it isn't 4,000 times the cost as well.
Cost per sale
Another way of cutting the information is to look at the cost per sale, or cost per £100 sales, or £1000 sales, etc. Cost per sale tends to present a truer picture of the campaign's effectiveness as it can also take into account any lead conversion and subsequent marketing costs (brochures, phone calls, visits, and so on) that are required to generate sales.
Key learnings to take from looking at response rate and media:
- Response often drives the cost of advertising media: the cheapest medium is likely to be the most un-responsive, so don't be fooled by apparent bargain buys - there may be a reason that slot is so cheap: no one wants it because it doesn't work
- Testing is the only way to establish the true effectiveness of different media for your product or service
- Response rates and effectiveness are just tools. It is up to you to decide whether it's worthwhile acquiring newspaper readers as customers compared to the return made from increasing sales to existing customers
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