Telephone and e-mail produced the highest response rates—2.60% and 2.45%, respectively—among direct marketing media channels in terms of generating leads, according to a Direct Marketing Association report, "2006 Response Rate Trends Report," released last month.
"For the last four years that we've done the report, telephone has been No. 1," said Anna Chernis, senior research manager at the DMA.
Chernis says she has some theories as to why telephone marketing may be garnering the highest response rates. "Most of direct marketing campaigns are multimedia campaigns, and telephone is used in most cases as a follow-up," she said, "meaning you already sent them a direct mail piece or e-mail, and you follow-up with phone call so the customer is familiar with your company and will be more responsive to the phone call. In addition, usage of telephone marketing is very costly and labor intensive, so companies use it when it is a very targeted campaign to minimize the cost." She added, "Customers—especially b-to-b—are more responsive to a human voice."
Bob Weinberg, president of RW Consulting, a direct and database marketing consulting company, said the telephone finding is not surprising. In fact, he said, it would only be surprising if telephone did not produce the highest response. The question, Weinberg said, goes beyond the rate of response to whether lead generation through the phone medium is profitable. "Some measure of profitability would be useful," he said. "Then you'd have a hot button." However, Weinberg said, getting that information from marketers is difficult.
Weinberg said he finds it particularly interesting that e-mail, which is so cost-efficient, is doing almost as well as outbound telemarketing. "That is very promising," he said. "E-mail and telephone are the least expensive and most expensive mediums [respectively], and you have close to the same response rate. I think you can surmise that the people who are responding are making very effective use of e-mail."
While the report was being developed, Weinberg provided advice that guided its statistical analysis of the campaign data contained in the report, according to the DMA.
E-mail also bests direct mail in terms of total overage response rate. Direct mail pulled 1.27%. "The fact that e-mail does better than direct mail is worth commenting on," Weinberg said.
The report covers seven media (direct mail, catalog, e-mail, inserts, telephone, newspaper and magazine), 19 industry categories and 30 products and services. Among its other findings, house-file marketing campaigns outperformed prospecting campaigns.
Response rates vary widely depending on the objective of the campaign, the media vehicles used, the industry in which the offer is made, and the products and services offered.
The DMA broke down response rates for four different campaign objectives: direct order (where direct marketing is designed to solicit and close a sale), lead generation, traffic building and fund-raising.
For direct marketers whose primary objective was to solicit direct order sales or motivate customers to make a contribution (fund-raising), catalog and direct mail produced the highest response rates (2.30% and 2.18%, respectively).
The highest response rates for traffic-building were catalog (10.34%) and telephone (7.83%), respectively. Direct mail also pulled a strong response rate of 4.62%, the DMA found.
In terms of response rates by industry, the manufacturing industry—predominantly a b-to-b industry—reported the highest average response rates (5.79%) for direct mail lead generation campaigns.
“Manufacturing direct mail campaigns are more targeted to the audience that they selling the product to because the promotion quantity of most of the campaigns is lower than in some other industries," said the DMA's Chernis.
However, Weinberg said, the DMA research is conducted anonymously, so the data are dependent on both the manufacturing companies responding as well as the exact size of the sample. "Without knowing the exact sample size or who's in it, this may or may not be surprising," he said. For the manufacturing industry specifically, 17 companies responded to the DMA's lead generation question in this year's survey.
For e-mail direct order and fund-raising campaigns, the professional services industry garnered the highest total average response rate (3.94%).