DMA benchmarks response rates

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The Direct Marketing Association will release a report next month that will provide response rate benchmarks detailed by media and by industry—data long sought by marketing departments eager to justify their expenditures.

The report, titled "2003 Response Rate Study: Direct & Interactive Marketing Campaign Metrics," will incorporate data from 1,500 campaigns, 480 of which were b-to-b. The DMA gathered the information through online surveys conducted in the first three months of this year.

The report will contain information from 26 industry categories, including financial products and services, business services, publishing and computer/ electronic products. Media covered include direct mail, dimensional mail, catalogs, e-mail, statement inserts, freestanding inserts, coupons, outbound telemarketing, newspapers, magazines, direct response TV and radio.

"This survey is the first attempt to cover the entire waterfront in terms of kinds of offers and kinds of business campaigns," said H. Robert Wientzen, DMA president-CEO.

Response rate irrelevancy

Response rates have been difficult to pin down because of various factors, including the product or service being sold, as well as its price. "Asking what is the average response rate is an irrelevant question," Wientzen explained. "The answer is different when you’re selling a Rolls-Royce vs. a $10 item."

The DMA has released some preliminary findings from the study. Not surprisingly, it found that 67% of b-to-b campaigns were driven by lead-generation and 30% were driven by direct-order goals. Only 2% fell into the "traffic-building" category.

The survey found that direct mail, e-mail and telephone marketing were the media that marketers use the most. Fifty-seven percent of respondents reported using direct mail as a regular part of their campaign efforts; 51% said they use e-mail; and 25% said they use telemarketing.

Of the lead-generation campaigns studied, outbound telemarketing emerged as the clear leader in response rates, garnering an average 8.2% response for calls made to marketers’ house lists and an average 10.7% response for prospect lists. Direct mail, meanwhile, received an average 4% response for house lists and 4.9% for prospect lists. E-mail marketing garnered an average 3.4% response rate for house lists and 5.9% for prospect lists.

Cost per lead lower for e-mail

Although phone and direct mail brought better response rates than e-mail, cost per lead for e-mail is much lower, making it more attractive to many direct marketers. The cost per lead was $78.32 for e-mail to marketers’ house files, while the cost per lead for direct mail to house files averaged $433.22.

"[E-mail] is the secret weapon right now, with postal costs skyrocketing," said Ann Zeller, the DMA’s VP-information and special projects.

The average cost per lead for e-mail to a prospect file is only $55.50, but many direct marketers are reluctant to use such files because of fears their messages will be perceived as spam, Zeller said. "It’s effective if you use it for your house files, but you’re wasting your money to use it for your prospects," she said.

Important data points such as conversion rates, revenue per conversion, revenue per contact and promotional cost per contact will also be detailed in the report.

In addition to providing response rate benchmarks, the study will enable the DMA to create an ROI index to provide further guidance to marketers. "It will help determine the most productive media to use for each industry," Zeller said.

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