One of the most frequently asked questions I get from clients about direct mail options is “Should we mail to the same audience multiple times or just once?”. The answer I tell everyone is “it depends”. Don’t get me wrong, a multi-touch, multi-medium campaign is always the best approach. However, the realities of limited budgets and the composition of the customer database or prospect list can have a significant impact of on how we execute our marketing campaigns.
There are probably as many different scenarios as there are businesses so let me focus on one very common scenario. I have tested this many times over the past 10 years across different vertical industries and most recently just 3 months ago and believe it or not, the results are always the same.
Example: Company A has a prospect universe of 100,000 records and a direct mail budget to mail 100,000 packages. The question is, is it more profitable to mail everyone once, 50,000 prospects twice or even 25,000 prospects 4 times. Assuming each prospect is of equal potential value and equal likelihood of responding, here is a good rule of thumb.
For each subsequent time you mail the same package to the same prospect, you can expect a 50% drop in response rate. So if your response rate for the first mailing was 1%, you can expect a .5% response rate for the second mailing, .25% for the third mailing and .125% for the fourth. A sample is provided below.
- Mail 100,000 prospects @ 1% response rate = 1,000 responses
- Mail 50,000 prospects twice = 750 total responses
- Mailing #1 - 50,000 @ 1% response rate = 500 responses
- Mailing #2 - 50,000 @ .5% response rate = 250 responses
- Mail 25,000 prospects four times = 468 total responses
- Mailing #1 - 25,000 @ 1% response rate = 250 responses
- Mailing #2 - 25,000 @.5% response rate = 125 responses
- Mailing #3 - 25,000 @.25% response rate = 62 responses
- Mailing #4 - 25,000 @.125% response rate = 31 responses
In this scenario where the prospects are all equal and you are mailing the same package, it is much more profitable to mail your entire prospect universe once. If you think about it, it makes sense. The first mailing will get all of the “low hanging fruit” – prospects who have an immediate need for your product or service. The subsequent mailings attract those that need more encouragement or are not immediately ready to respond.
As you can see, different options produce different results. That, combined with the different needs and goals of marketing plans, can produce many different selections for marketing teams.
I’m always happy to discuss mailing scenarios – contact me if you have a specific question that I can help you with!