Email Marketing: Email and Direct Mail Response Rates
Email marketing or direct mail response rates depend for the most part on three things: the direct marketing offer, the mailing list used and the timing of the direct mail or email.
Direct marketing response rates for rented postal mailing lists can range from 0.5% to 1.0%, or on rare occasions 1.5%. High quality or highly targeted mailing lists produce the best response rates. Response rates for direct mail sent to existing customers, or your "house file," can range from 1.0% to 10%, or sometimes 15% or more. A response rate of 1% means if you send 10,000 pieces of direct mail you would get 100 orders. If each order was an average of $200 then total revenue from direct mail would be $20,000.
Automotive direct mail ROI and direct marketing statistics
According to the Direct Marketing Association, in 2007 auto retailers spent $7.3 billion on direct marketing campaigns that produced $248.1 billion in sales. That makes a return on investment of $33.81 in sales for every $1 spent on direct marketing and direct mail. Automotive OEMs, including Ford, GM and Chrysler, spent around $8 billion on direct marketing advertising in 2009, creating $77.8 billion in sales. That's an ROI of $9.68 for every $1 spent. By 2012, auto manufacturers are expected to invest $9.8 billion on direct marketing, bringing in a projected $108.1 billion in sales. That would produce an ROI of $11 for every $1 spent on direct marketing.
About 75 percent of the auto industry's investment in direct marketing, database marketing and sales are targeted to consumers. Business to business sales make up the remaining amount. Also refer to our auto industry data center for more statistics.
How soon consumers buy aftermarket parts
Research shows consumers purchase most of the parts for their vehicle in the first three months of ownership. We've seen that window of time compress in recent years. It has gone from a four-month window several years ago, to today where many consumers will buy parts and accessories as quickly as the first several weeks. That's one reason it's important to reach consumers immediately after they purchase a new or used vehicle.
That's different from the replacement parts "sweet spot" or window of time when most consumers purchase replacement auto parts. Average time of car ownership is growing and is now around eight or nine years. The sweet spot for replacement parts has traditionally been vehicles that are five to 10 years old. Four out of 10 aftermarket replacement parts are sold for cars in this sweet spot which includes over 80 million vehicles. One factor affecting replacement parts is engine durability. The sweet spot for engine replacement parts has been moving from vehicles in the five to 10 year-old range, to vehicles in the eight to 13 year-old range.
DMA direct mail response rates and email response rates
The Direct Marketing Association released their statistics for 2010. Email sent to a house list had an average 19.47% open rate, 6.64% click-through rate, 1.73% conversion rate and unsubscribe rate of 0.77%. Catalogs had the lowest overall cost per lead or order at $47.61, a little better than inserts at $47.69, or outbound email at $53.85, and mailed postcards $75.32. The results for paid search showed an average cost per click of $3.79 with a conversion rate of 3.81%. The average conversion rate (after click) for Internet display ads was a little higher at 4.43%. Letter-size envelopes had an average response rate of 3.42% when sent to a house list and 1.38% when sent to a prospect list.
Variables that affect direct mail response rate
Response rates to direct mail offers depend primarily on three things: the offer (and the "offer" includes things like price, the design of the direct mail piece, the photography, the words, etc.), the mailing list and the timing of the direct mail. Ways to improve the "offer" include the call to action which may include devices like a coupon or limited-time discount. Also consider how easy it is for the customer to respond, on a website or by calling a toll-free telephone number.
Things to consider for the mailing list include how the list is compiled, or who is targeted by the list.