Measuring the Return on Your Direct Mail Investment

By Martha Retallick
Posted Friday, January 28, 2005

In direct mail lore, there's a rule stating that you can measure the success of your efforts by a minimum response rate of 1-2%.

In other words, if you send out 10,000 pieces, you'll have a successful mailing if at least 100 recipients respond to your offer. (One percent of 10,000 is 100.)

That's one view of direct mailing success.

Permit me to offer a different perspective: one from the small business world. Specifically, I'm referring to those small business people who work by and for themselves. Call them "One-Man Bands," "Working Soloists," "Free Agents," or whatever you'd like.

To help you remember these two perspectives, let's give them a couple of catchy names:

1. The "Playing the Percentages" Perspective. This is the "industry standard 1-2% response rate on your mailings" perspective you've heard so much about. This is the yardstick favored by businesses that are sending large quantities of direct mail to sell mass market products.

For example, if I own a pizza parlor, and I'm doing a "use this card for 10% off on your next order" mailing to all residences within a three-mile radius of my business, I might have a mailing list of 10,000 names.

You'd better believe that I'm going to watch the overall response rate like a hawk, and I'm going to be looking at precisely where those hungry customers are coming from. If most of them are coming from a handful of apartment complexes next to a college campus, I'll know to send my future mailings to those complexes.

2. The "You Only Need A Few" Perspective. This is the one for those One-Man (or One-Woman) Bands who are selling services that take a fair amount of time to provide. Like marketing consulting, public relations services, graphic design, or customized computer software applications.

For these folks, a handful of new or repeat clients from a promotional mailing is quite enough. After all, as the owner of a one-woman graphic design studio told me once, "I don't want to be a victim of my own [direct mail] success."

About the Author
Martha Retallick, "The Passionate Postcarder," hails from Tucson, Arizona, USA. She is the author of Postcard Marketing Secrets, a downloadable PDF manual that will show you how to put postcards to work for your business?profitably. Learn more about it at:

(http://www.PostcardMarketingSecrets.com)