Last week I shared a list I had compiled for an internal e-learning course and this week I wanted to share a fascinating piece of research.
I was asked whether email marketing was more effective than direct mail, and by what margin.
Based on some really cool work my colleagues and I have been doing with a client’s email communications, that I hope to go into more detail on later, I was hopeful that the ability to personalize, and measure, the email experience would lead to it being more effective.
The results were surprising.
First off, both email and direct mail marketing are really dependent on the content within the piece, the industry/sector the sender is in and, to a large extent, the relationship with the recipient. For these reasons, it’s very tough to definitively say “this is the benchmark to which you should aspire”. More accurately, we should look to gather as much data as possible, look to prove the ROI of your campaigns and look for increasing metrics over time.
That being said:
The standard response rate for the first piece of direct mail sent to a recipient is about two per cent but a marketer could consider any where between one and three per cent as a “good” response.
Bearing in mind that a response to a piece of direct mail is a complex action – the recipient must open the piece, read the piece and then take action on it – two per cent sounds like a pretty good response rate..
However, this two per cent response jumps to between five and 35 per cent when the direct mail has been sent to a recipient for a second time (as a renewal).
Measuring the effectiveness of email is much easier. We can track open rate and click-through rate extremely easily and, what’s more, we can use this historic data to tailor the content by the user’s interaction. So just by using the content, by clicking through on links I find interesting, the content get’s smarter and more personalized to my interest.
For a vanilla email, sent to an opt-in (as opposed to bought) email list, marketers can report an open rate of between 20 and 40 per cent combined with a six per cent click-through rate as average. Anywhere above that and you’ll be doing well.
See the graph below for more detailed benchmarks for your industry.
Because you can effectively and cheaply segment your email database by its past actions and by self-declared preferences (upon sign-up), smart email marketers can significantly increase both of those metrics.
However, you can only improve on what you measure so it was worry to find out that 18.7 per cent of email marketers, in a 2006 survey, didn’t know their open rates…
So, as expected, email marketing would seem to give the direct marketer much better ROI and much better metrics. However…
According to one article I found, both email and direct mail marketing tactics work better for non-profits (where better = raise more money) when used in tandem.
Interesting. In presentations and brainstorms, we always talk about the need for truly integrated communication plans where the online and offline components of a campaign truly tessellate. I’m glad to see that the quantitative, as well as anecdotal, evidence supports what I’m sure all marketers already suspected – no one tactic can reach all of your audiences.