Direct Mail - Conversion Rates from Response %

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Hey all how's it going.

I'm looking for some advice from all the people who do direct mail.

I am planning on doing a small campaign to test and see if I can achieve some good results.

The offer? ADT Security systems.
Payout commission? $300
Direct mail piece: 9x12 evelope
Lumpy with some kind of cheap object that is related.
2 page sales letter.

If done correctly I could get a 20% response more or less and I was curious for people that had done this, what are the conversion like on people that respond to the direct mail?

Could I see conversions of 1 in 5 people that responded because of their interest ten into a sale or what?

Not sure if my thread is coming off dumb or not by I am trying to get a feel for the conversions of people who respond. Thanks!
#offline marketing #conversion #direct #mail #rates #response
  • Couple things here:

    1. Response rate doesn't matter; only ROI.

    2. Nothing is impossible, but if you expect to get a 20% response on a cold mailing, I've got a sinkhole on a golf course in Illinois to sell you.
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    • I think it will be easier than you say. a decent sales copy along with a personalized large envelope (lumpy object as well) can defiantly pull a 20% response. Then again I haven't done this before but I have been looking at a lot of cold mail case studies and people have pulled way more than 20% response.
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  • You're not coming off as dumb, just misinformed.

    20% Direct mail response rate is not going to happen unless these people are super targetted, AKA begging to get info from you.

    According to the Direct Mail Association:
    DMA Releases 2010 Response Rate Trend Report
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  • Here is a suggestion that would/should bump your response significantly.

    Every day get the crime report from the local PD website or newspaper or wherever it is posted for your area.

    Then do a mailing to a 1/2 to 1 mile radius of where there was recently a fire or burglary. Attach the report of the fire/burglary to your sales letter.

    Much better than a random mailing to a list that currently does not have any fear.
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    • The above advice is worth it's weight in gold. Use it.

      The figures you plan to use for the cost of your mailing are a not quite correct. I just mailed some 9x12 envelopes and my cost was $1.10 each. The only thing in side was a sample card (9x12) to each of my advertisers.

      For this to really give you the highest return possible you will have to have an extremely targeted list. Police forces are being cut, across the country, so people are looking for alternative security solutions. Your timing is good, just know that other security alarm companies realize this too. You'll just have to do a little extra work to make this truly payoff for you.

      It can be worth it, if you're willing to make the extra effort.
    • Add some info about identity theft, one of those stories of an 8 year-old who's 6 months behind of a luxury home in some other state and owes $100k in credit card debt.

    • This is an awesome idea. If you can cross reference this with ewen's list he found, and some powerful copy like Ben's, you might have a real winner here.

      This is exactly how you create a highly effective direct mail campaign, especially when you can take advantage of recent situations.

      Because of the strong competition already in place with these systems like TyBrown mentioned, you may actually find that a sales letter could be more effective for you than a postcard.
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  • Thanks for your responses guys! this is a little rough to hear though, I wont lie.

    I'm having trouble finding how to profit from this now.

    here are the costs:
    100 9x12 evelopes=$110
    copywriting $250
    stamps and EDDM= $.70/piece

    total cost for 100 houses= $430

    lets say I receive a 3% response I will probably have ADT close one of those responses at $300 sale for me. I will end up with a negative ROI with a loss at $130.
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    • please who will you be sending it to, i mean your subscriber base
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    • First of all if you're only budgeting $250 for the copy it's
      probably not going to have a very good response rate.

      Good direct response copywriters are not charging
      $250 for a sales letter.

      You should really be thinking of paying a whole lot more
      for the original copy (say $1,000+) and hiring someone
      who can also give you some good marketing advice.

      And once you have a mailing that's profitable rolling it
      out in a big way so your initial cost becomes
      inconsequential.


      Second the idea already suggested of sending a report
      of a nearby robbery and targeting that area is a great
      one.

      You could narrow it even further if you chose to...down
      to THAT street.

      If you really want a response these days you could
      customize EVERY letter you send for example using
      Google maps to get a satellite image or photo of
      each home.

      With a customized headline for each home along
      with the picture like:

      "WARNING: Your Home At 23 Riverdale Drive Is At Risk..."

      It depends how much personal work you're willing to
      put in to get a big response from your mailings.



      You'd have to define what you mean by a "response"
      to have a realistic idea of the kind of response you
      could expect.

      If you mean getting 20% of the people you send a letter
      to to buy from you that's not really going to happen unless
      you have a list of prequalified prospects of some kind.

      Getting 20% of people you send a letter to to contact
      you would be an amazing accomplishment...achievable
      but only fantastic luck or brilliant marketing will get you there.

      Kindest regards,
      Andrew Cavanagh
  • I thought EDDM was just standard flats? I haven't check the website in about a week so are envelopes new? I'm not 100% sure you can mail those with EDDM. I could be wrong.

    Also, couldn't you do the same thing, minus the lumpy mail, using EDDM postcards?

    Jerry
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    • Direct mail used to return me 5.5 per thousand mailed 10 years ago.

      Now it is down to about 0.7 per thousand. Mail 10,000 and get 7 to respond
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  • You could also do just postcards and it would look like this:

    100 9x12 postcards = $131
    copywriting $250
    EDDM= $.16/piece = $16

    total cost for 100 houses= $397 rather than $430

    Just a suggestion. I was going to do the same with green coffee bean extract affiliate program and target high income homes.
  • Just a few things:

    1) You're copywriting expense of $250 is a one time expense. Since you'll be able to use that same letter/flyer over and over again, I'm not going to calculate it in the ROI. You can, but with the micro example you gave based on 100 letters. Each letter has a fixed cost of $2.50 in copywriting expense. Mail out 1,000 that cost is now 0.25 cents. 4,000 sent, it's about 6cents. You see how that can effect your results?

    2) You're assuming* that ADT will close 33% (1 out of 3) of the leads you send them. That's pretty high. I'd me more comfortable with expectation of 20%. You can always ask their account managers what their typical close rate it is.. heck it can be 50%.. but I like to be conservative when forecasting.

    3) I think you're better off basing your analysis on at least a minimum of 1,000 mailers not 100.

    4) At the end of the year, you'll be able to write off the amount you spend on copywriting, as well as your postage, supplies, etc..This will reduce your taxable income. However if you build a business that you want to sell one day, you'll want to pull back in these parts during the valuation process to get your discretionary income higher.. (this is a little more advanced and likely does not apply here)

    1,000 mailers:
    Postage: .70ea (based on your above calc)
    Letter w/ treat inside: .90 each (based on your above calc)

    Response Rate (this is assuming you can get a 3% response rate): 3% (30 leads) Cost per Lead is $27 (Total expenses / Total Responses)

    Close Rate: We'll assume 20% not 30%. = (6 closes)

    Commission: $300

    Total Revenue: 6sales * 300commission = $1,800 (it will actually be a little less, I'm just using round numbers)

    Expenses: Letter + Postage: $810

    Profit: $990

    If you have expierience with this and these #'s are very accurate to what you typically see in terms of a ROI, you'll be comfortable in saying that for each letter you mail out you'll make about $1 (profit divided by total mailers)

    Mail 1,000 you make $1000... Mail 10,000 you'll make $10,000


    edit: fixed the calculation.
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  • I recently saw a case study of a guy who mailed and got a 10% response because his mailing was rto people that purchased financial related products in the past. he wasnt the one to sell them those products before. How do you find a list to purchase like this?
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    • Yes, now you're onto the issue - Do NOT mail to a cold list until you have a proven winner and you know the math. Your single biggest determinant of success is how targeted your list is, then how closely your offer matches their need. This is what Gary Halbert called "a hungry market" and what marketingexperiments.com calls "channel motivation". Both Halbert and ME have done thousands of tests and call this the most important factor.

      I just mailed 88 letters to companies re: making their websites convert.
      88 9X12 envelopes cost $22
      88 address (had a va track them down) $50
      88 stamps (90 cents to mail each envelope) $79
      I addressed them by hand

      Total cost - $149
      I sold $350 of services that I think will turn into another $1,000

      The list was very targeted. People on page one of Google, Google Adwords for specific categories.
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    • Mailing List Finder -- Search & Compare Mailing Lists

      Just beware, you don't own the list, you rent it,
      therefore you pay everytime you mail to that list.

      Best,
      Ewen
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    • Unless I'm mistaken, don't you own my HYBRID MARKETING COURSE? I cover how to get a list like this in one of the videos. Beyond that, if you have questions just PM me buddy.
  • Wow thanks so much ewen! Always quality info from you!
  • Our friend Ewin Mach is a boss so take him seriously.

    Why rely on ADTs ability to close when YOU can close. Having said that, I'd run a LEAD GEN campaign offering a FREE REPORT for a lead.

    I'd maybe send a post card like.....







    Get the leads with that then work on closing them.

    I guess I took care of your copy too.

    Steel and use.
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    • I'll split test both. I might receive more responses if I just put a phone number for them to call. But I might receive less responses leading them online but might close more. We will see. Also thanks for the free copywriting haha!
  • ADT is putting there offer into the marketplace in so many different ways that I believe your message would be diluted to the point where you would see a tiny response, if any. ADT is already putting into bulk mailers (Valpak/Money Mailer), TV ads, Radio, newspaper ads, CPA (pay per call, etc.) and much more.

    For you to put a lumpy mailer in the mail and expect that by virtue of it being lumpy it's going to stand out and pull a 3-20% response rate is erroneous, in my opinion. The idea behind a lumpy mailer is to get someone to open up the mail. If they do, however, and find the same offer that they are getting from various other channels it doesn't make it more likely for them to buy.

    Your lumpy mailers are going to do better with lists that you've cultivated for products that are proprietary with good dollar amounts and good margins. I don't see them doing well for mass advertised/mass appeal consumer products.

    There are models you can follow, though, if you want to do well with ADT. I've got family members who go door-to-door every summer selling security systems. They pull 6 figures doing that in 4 months.
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  • Ty Brown and Bob Ross bring to light some important suggestions. With regard to Ty's point, I want to mention that's one reason I opted to use a "blind" lead gen campaign such as the one I posted earlier.
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    • I agree. I think you'd have to do this as a lead gen to sale campaign rather than an affiliate campaign.

      I think if you were to do a survey you'd find that most would find value in a security system but a small portion are willing to actually pull out their wallet to get one.

      That's why door-to-door sales do so well because you can 'get in their face' and 'hit them in the gut' with how important a security system is.

      If you can be successful in getting their lead through a mailer I think you'd need a multi-step system to actually end up selling it. I think you'd need to do a phone call to set a face to face and then possibly follow up after that if you can't make the sale the first time around.

      The question you need to ask, though, is what are the chances of pulling leads from a campaign like this in a cost-effective way? ADT is spending millions to determine what message needs to go out in the mail to pull a response. In doing a mailer you'd be competing with BIG dollars and starting from scratch against a massive juggernaut.

      Does that mean it can't be done? No. But if one was going to test in the mail I think having control over the product is a good first step. I don't mind competition but that level of competition would scare a wimp like me away.

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  • Oh yeah and though I failed to post it, I actually use a phone number AND lander when I can.
  • Good suggestions.

    Just get the suspect curious enough to raise their hand and offer you their contact information for you to get an appointment.

    IE: I bet you'd be more profitable going door-to-door ice cold. Margins suck for a one-time $300 commission while supporting lead gen investment.
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  • I agree that the list of recipients need to be targeted. Just as suggested above, look for areas that are a bit higher in crime rate, especially burglaries, car break-ins, etc. BUT I think the key is to target the areas just outside of that central location and more affluent neighborhoods. ADT requires a monthly fee - which you won't easily find in a more urban setting. Might also look into small businesses in those areas as well. Not big box stores.
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    • Those that have already enquirerd about a home security system, but not bought, is still way more targeted...so why start all over again creating a new lead when one has been made?

      You ask the list broker how they were created and then go away and look at the ad which brought them in.

      If you are going to send them to a website, cookie them and have your ad automatically show up on the websites they visit.

      Your ROI is going to be much higher than asking your website do a one shot
      call to action.

      Best,
      Ewen
  • For planning purposes try 1% to 2% and see if the numbers stack up. 20% is not going to happen unless you use a windowed envelope with a naked woman on the front, a holographic stamp and with a $20 bill inside
  • Basically, everything boils down to the proper execution and the alignment of the right factors at just the right time.

    It is very well possible to get a 20% response rate and more and after that convert those responses into sales, but you have to get a lot of things right. Something as small as print design and quality can have a big impact on your response rates so for starters, you should make sure that the right printer handles your direct mail prints.
  • I been doing direct mail but the conversion doesn't seem that high especially selling or promo products unless giving something free trial 1st only convert which the conversion will be higher.
    Direct mail usually costly so you need to calculate the conversion with the ROI .
    I prefer to use online email marketing to direct mail because i can see the conversion 20% might be hard unless you are a wellknown brand all the while or direct mail only to your existing customer and wish them to add on purchase and repeat purchase.
  • [DELETED]
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    • Best marketing would be to leave post cards in peoples houses.



  • TA,

    This is just MY opinion, so don't take it personally...

    With 40 years of Direct Response marketing experience under my fat old belt, I think you are receiving some good advice, and some terrible advice.

    Fact is, you know nothing about direct response, which you freely admit. You don't understand the MATH involved, but you can get a complete education for about 5 bux.

    My opinion is you are doing way too much work and thinking to pick up some small dollar amounts, probably less than a minimum wage job.

    To educate yourself, you only need to get one book, maybe your library has it or go to Amazon and searc for 7 Steps to Freedom by Benjamin Suarez...today I saw onw for .83 cents, with 4 bucks postage, you have a textbook on Direct Response...the MATH you'll find inside has been tested and proven over the last 40 years by a 100 million dollar a year company.

    Don't do anything until you understand the costs of direct response.

    That being said, here is my best advice for you.

    Contact Bob Ross about doing a postcard campaign, get some quotes and figure out a minimum mailing...

    OK, ideas for the postcard. I'd create a newspaper looking front, with headlines and pictures of criminals, most wanted type thing, HAVE YOU SEEN THIS CRIMINAL?

    Make it a story about a most wanted criminal, maybe two column format, with an adjoining story about a local break in.

    On the back, upper left quarter, put a map of the area you are sending to, put red stars where the known sex offenders live, get from your county web site...and maybe blue stars where home break ins or burglaries have recently happened. Tell them for less than a dollar a day, or whatever it comes out to, they can get serious protection from the thugs.

    I'd use both a phone and website. Have a script ready for the call, if you are going to answer it, or if you use a service, which I doubt, then read the script or automate it to get them to visit the web site or to leave their phone numbers.

    You could offer a FREE crime report specifically for their neighborhoods, or some such thing.

    IF you choose to send an envelope, the teaser copy (no matter the size) has to get them to open it, a lumpy will work, but if it isn't a relevant lump, then it will immediately get trashed. Choose your lump carefully.

    The more you know about crime in your area, the more expertise you have, the better you will do. It sounds like you just wanna get leads to give to ADT, is this correct?

    I'm of the opinion you should try both a little footwork, door-to-door and direct response if you insist on doing this.

    Direct response CAN make you large sums of money in short periods of time, I don't see it happening with what you are trying to do, but, please feel free to show me how wrong I am, I'd love that.

    But, please, get some education about what numbers are REAL in the world of direct response and once you do, you might want to try a different money making way.

    Good luck.

    gjabiz

    PS. I think Bob Ross is your man to consult with, even if he charges for the consult, it would be worth your time.



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