Why Direct Mail Campaigns Underperform And What To Do Next

Randy Lisciarelli
October 5, 2018

Let’s be honest, direct mailings don’t perform well every time. But how can you know for sure that your mailing efforts didn’t work? Is a campaign that didn’t hit the expected response rate a complete failure?

When you aren’t sure, compare your results with industry benchmarks, other marketing tools, with your previous campaigns, and with your competition if there is available data.

Overall, the response rate of direct mail has been reduced over the past years. According to the Direct Marketing Association (DMA) in 2017, direct mail received a 5.1% response rate for house lists and 2.9% for prospect lists.
What about other marketing platforms, are they performing better? To determine the response rates for digital marketing, emails, for example, the DMA tracks the “click-through” rates and compares them to the campaign’s conversion rates. By comparing these two figures, it is easy to determine the overall success and influence of a digital marketing campaign. For house lists, however, the numbers indicate that response rates for email is no higher than 0.6%. Do you feel relieved?

How You Success on Direct Mail Campaigns

The average response rate for a prospect list can raise to 2.9% if:

You are renting a frequently updated mailing list, rather than an internally kept house list).

You are promoting a free offer rather than a price based offer, which typically lowers response rates. Free offers are important for lead generation campaigns because you will get responses from those who are interested in your specific products.

So, if you didn’t hit the benchmark, there can be a variety of reasons why your campaign underperformed. Let’s take a look at the important things to analyze when conducting a mailing campaign.

Tracking Your Performance

If your past campaigns leave you with only an “A for effort”, make sure that from the beginning you have put in place an effective tracking system when sending the next campaign. A tracking system will help you to gather all sorts of information, such as the number of:

visitors on custom landing pages

phone calls

orders

email addresses captured

redeemed coupons or

scanned QR codes, etc.

Understanding where your potential clients are contacting you from is vital for your direct mailing success. Tracking each point of contact i.e. the phone number, URL, coupon code, etc. is an efficient way to gauge how successful your mailing is.

Rule number one when setting up a tracking system is to make sure that any point of contact listed on your direct mail piece is unique and trackable.

Testing Your Performance

Our second strategy for peak mailing performance is testing.

While testing can be an annoyance to those who are just experimenting with direct mail, serious and long-term direct marketers understand that testing is a process that should be done on a regular basis.

Testing can answers all your questions about every aspect of your marketing when deciding which offers, ad copies, and incentives bring in a higher response rate. Through testing different promotions, you’ll be able to improve response, as well as improve knowledge of customer differences and preferences.

Lastly, testing can validate your business instincts or prove it wrong which is why it’s so valuable.

Methods of testing direct mail campaigns include:

A/B Split Test is the most common type of testing. It involves testing the exact same direct mail package with two separate versions – versions A and B.
Multivariable Test: this test involves, you guessed it, testing multiple elements at one time. This could include something like testing 3 lists and 2 offers or even multiple formats all within the same mail campaign.

It’s important to remember that testing helps you prepare for success, mitigate risks and estimate your business’ level of investment. Testing also helps you find your best marketing approach, thus improving your direct mail campaigns performance.

Read more about how to Enter a New Market with Direct Mail A/B Testing

What else you can do

When your direct mail campaign is underperforming there are other things that you can do to potentially improve the response.

Refine and update your list. Every aspect of a direct mail campaign revolves around the quality of the mailing list. A bad mailing list can increase the cost of direct mail by a staggering amount. The costs of printing, processing, shipping, and postage increase if duplicate addresses are not found and eliminated from the outset. Keep your records current as you receive feedback. Connecting with existing clients on a regular basis aids in keeping your internal list accurate.

Send repeated and subsequent mailings: A single mailing does not make a campaign either. Be prepared to send out multiple mailings for a better response rate. For a direct mail campaign to be truly successful and effective it takes at least three subsequent mailings to the same prospect list. You also have to be patient with direct mail. Depending on the content of your offer, it can take anywhere from a few days to a month for the results to roll in.
Integrate Direct Mail with digital marketing: Businesses see the highest response rate from direct mail campaigns that are integrated with their other marketing efforts. According to royalmail.com, more than 50% of consumers prefer a combination of digital and physical marketing. These customers feel more personally engaged in advertising and they can spend as much as 25% more due to the combined effort.
Add a submission form on your landing page, this will allow you to better know your audience and create a connection with your target audience. Inserting a simple contact form that encourages your prospect to ask questions and request samples or pricing, can be the beginning of a beautiful partnership.
Work with a mail house: by using the professional services of a mail house, you can benefit from lower postage rates and cost-effective mailing solutions. An experienced mail house will also get a better timeline for your time-sensitive campaigns. Designing, printing, packing envelopes, tabbing and folding, all those time-consuming services can be fully outsourced at a significantly lower price than doing them in-house.
Repurpose: When appropriate you can utilize previous mailers for local events, sales, handouts, etc. Consider mailing to vendors as well as prospective consumers.

Conclusion

There are many variables that play into the success of your direct mail campaign. But the most effective and useful things to do in order to increase your response rate are:

making sure your list is up to date

have a compelling offer

test your mailing variables on a regular basis

attempt to optimize your results with any variation of the aforementioned ideas

Remember, to get the best results you must treat your direct mail as an experiment which means careful planning and analysis of all potential variables to maximize returns.