Can direct mail response rates be predicted?

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Quad/Graphics has been testing a new technology platform for direct mail that predicts response rates, increasing reliability and shortening time to market—at a fraction of the cost of traditional mail testing.

The virtual testing platform, called Accelerated Insights, can test up to 20 content variables in one pass. It uses a sophisticated persona matrix that combines demographics with emotional characteristics to predict what factors motivate someone to act on an offer—all accomplished without a physical mailing. Using Accelerated Insights, Quad has helped direct marketers:

• Reduce total testing time to 60 days,
• Realize 97% accuracy on projections,
• Achieve increased response rates of 18-27%, and
• Lower testing costs by as much as 90%.

Accelerated Insights’ testing platform has been in limited release for the past 2-years, used by customers in a range of business categories including financial services, insurance, health care and retail. The platform relies on a vetted pool of survey respondents that’s differentiated based on hundreds of characteristics, drawing from that pool to create survey panels mirroring target consumers. Based on this information, marketers determine the most cost-effective package before sending out a single piece of mail.

According to Scott Harvey, Quad/Graphics Sr. VP Marketing Solutions, “This technology creates a roadmap for campaign creative that tells marketers exactly what is most important to customers & prospects.”

You can watch a video on how it works

 

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The direct mail response rate is difficult to predict, the first thing to understand is that it varies from business to business and from town to town depending on the nature of the market. In some places, the competition is tight for a particular product or service, and for others, there might be an opportunity for new businesses as there aren’t many players to intervene. Even though it’s subjective, every organization pursues the campaign with the ultimate goal to get better returns. Speaking of returns, let’s take a look at the average returns for a direct mail campaign.

1. Personalized mail: Personalized mail is the targeted list an organization works on for a direct mail campaign. The average return on personalized mail is 3.7%. Although the returns might get better if the targeted list gets tighter and efficient.
2. Every Door Direct Mail (EDDM): EDDM is the type of direct mail campaign where the organization is looking to target new prospects, maybe in a new neighborhood. While practicing EDDM, the average return would be 1.0%.
3. Cost per acquisition: for an organization practicing direct mail campaign the cost per acquisition or customer is only $19. Cheaper than paid searches, that is $30.
4. As far as the Return On Investment (ROI) is concerned, a direct mail campaign provides returns up to 15%-17%.