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 When client we have worked with planning direct mail promotions very often we are asked the question, "what response can we expect from this mailing?"
The answer is simply...
You should never expect anyone to predict response or guarantee results with direct mail promotions. It simply cannot be done. Is Predicting Direct Mail Response Rates Possible?
You can get at best some rough projections. Projections may be based on previous history of similar products or services preferable sold by direct mail. But, without previous history that is reliable, accurate, and applicable any numbers committed to paper are 100% guesswork. A knowledgeable consultant may be able to provide you with industry wide averages. Or they may be able to apply some experienced knowledge. But these can not serve as a reliable predictor of results.
To find out what the response to your promotion will be you need to test a sample promotion. Your test needs to be small enough that you can afford to see zero response but large enough so that you get a significant response. Begin establishing your own historical data. After you have tested a direct mail promotion you can then use that response to project the "possible" future response you can expect from a second larger mailing.
Remember... projections are always hypothetical and they are not guaranteed. A Direct Mail Response Rate You Can Accurately Predict
A direct mail response rate you can predict is what is... your lowest acceptable response rate. Figure out this number by determining the minimum number of orders you must receive for the profit from the sales to cover the cost of the mailing.
For example: If you found that you must get 100% of the direct mail recipients to purchase your product to cover the cost of the mailing your expectations may not be realistic. In general the fewer number of sales you need to cover your costs the less risky the promotional expense is. If you are still having trouble making the equations work make sure you count the value of future sales in addition to the initial sale. Great direct mail promotions are very often executed at break-even (or an acceptable loss) in anticipation of future sales.
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