That’s a key finding from the Direct Marketing Association’s just-released 2012 Response Rate Report.
Bad news and good news
The bad news about paper direct mail is that response rates have dropped nearly 25% over the past nine years. That and higher postage rates make for a lower return on investment.
But there’s good news, too: Snail mail still gets more response than e-mail blasts. Response rates for mailings averaged 3.4% to current-customer lists and 1.28% to new prospects.
Response rates for e-mails average 0.12% and 0.03% respectively.
Some forms of snail mail work better than others
Direct mailers have long believed that a mailing piece that stands out in the mailbox by virtue of being bigger or thicker than regular letters gets higher response. The new findings support this.
Catalogs to existing customers average 4.26%, the highest response rate of any type of mailing to a house list (but only an anemic 0.94% to new prospects).
Oversized mailers are next with old and new customers alike, averaging 3.95% and 1.44% response respectively. Letter mailings are close, with 3.4% and 1.28%, while standard-size postcards do worst, averaging 2.47% and 1.12% — a disadvantage that may be partially offset by postcards’ lower postage rates.
So do some forms of e-mail
E-mail’s 0.12% response rate for house lists may look dismal, but not compared to its 0.03% response average for new prospects. This is actually an improvement over response rates from the 2010 survey, released two years ago this week.
But some product categories do better in e-mail blasts than others.
Financial services e-mails’ open rates top 30%, while publishing and media (14.9%) and apparel (14.7%) run neck and neck for second. But publishing and media enjoyed the highest action rates per impression (0.013%).
And some things are equal
E-mail also had a far higher ROI — 28.5, which is four times higher than snail mail’s 7.00. But that’s not because of high return, (Snail mail’s is far better.), but because of low investment; with e-mail, there are no printing or, worse, postage costs.
Whether you’re using direct mail or e-mail to attract new customers, though, your costs will be about the same: $51.40 per order or lead for direct mail letters and postcards vs. $55.24 for e-mail.
What’s a local advertiser to do?
If you’re a Richmond advertiser, printing-free, postage-free direct marketing may sound tempting. But given the relative effectiveness and cost per new customer, maybe you should resist the lure of digital channels, even though other advertisers who are increasing digital’s market share can’t.
Better yet, mail catalogs (if they’re appropriate for your business and you can afford to print them) or oversize mailers such as jumbo postcards to existing customers.
“[E]ven though direct mail is less effective in driving response than… a decade ago,” advises Yory Wurmser, DMA’s director of marketing and media insights, “[it] still is among the best media for generating overall response.”