Small Business Direct Mail

Today's blog takes a look at the average direct mail response rates for B2B small businesses and compares this versus the results from Profitworks`first direct mail test.

Back in January of 2011 Profitworks completed its first direct mailer for a customer. The piece was sent to 2,762 business in Waterloo, Kitchener, Cambridge and Guelph based on select targeting criteria. The direct mailer was sent only to a small number of businesses as it was a test to see if direct mail could be a profitable marketing method for the particular customer. As you can see it was profitable and as a result we will be doing more direct mailers for this customer. Despite a lower then average response rate the program still made a great return on investment at 25%. Below are the results in comparison to the industry average. I am thinking the response rate was lower then average because we did not have a very high value offer. In addition in hindsight I think the graphic design could have probably been improved in a few ways as well. For the next direct mailers these learnings will be implemented.

Direct Mail Industry Averages

Response Rate = 1-2%

According to the DMA average direct mail responses for B2B was 1.38% as of June 2010.

Results From Profitworks` First Direct Mail

Pieces Sent = 2,762

Responses = 7

Response Rate = 0.3%

Customers = 1

Additional Profit = $750 per year

Cost = $600

Net Profit = $150

Year 1 ROI = 25%

Payback = 10 months

As you can see for this particular customer direct mail can be a great investment as they can pay back their investment in under a year. One other interesting note was that we continued to get responses from the campaign up to about 8 weeks past the drop date. So if you are doing a direct mail campaign don`t expect to get all your responses the week it drops. The contacts will more likely slowly roll in if you are targeting businesses.

If you are interested in learning more about how to design an effective direct mail piece, read our blog article titled Direct Mail Design.

I help various B2B small businesses in Waterloo and Kitchener generate new customers by developing and executing joint sales and marketing plans. For my customers we often include direct mail in the marketing plan mix, assuming it makes strategic sense and we think it can be profitable. If you are interested in keeping up to date on issues related to generating new customers for B2B small businesses, like direct mail, subscribe to this blog below. Just enter your email in the box provided.

I hope you have found this summary of the results of Profitworks` first small business direct mail a worth while read.