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THE LEVISON LETTER
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Action Ideas For Better Direct Mail,
E-mail, Web Sites & Advertising
Published by
Ivan Levison, Direct Response Copywriting
August, 2002
Volume: 17 Number: 8
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"What's A Good Response Rate?"
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When I talk to new clients about writing an e-mail or
letter for them, they often say something like this:
"Ivan, what kind of response rate do you think
we might
get? 1%? 3%? All we need is a ballpark guess. And don't
worry. We won't hold you to it."
I certainly don't blame them for asking. They're spending
their money, not just on me, but on the cost of list
rental, production, postage, etc.
I sure wish I could give them a number, but I can't.
You
see, there are so many variables involved, guesstimates
just aren't very helpful.
Let me list just three of the many important factors
that
affect response rates and I think you'll understand my
reluctance to whip out my crystal ball and make
predictions!
*** 1. THE LIST. Is it a house list that's well cleaned?
A compiled list? A brokered list you've never tried
before? Without having experience with a specific list,
you're in the dark!
*** 2. THE OFFER. Let me offer your prospects a free
Rolls Royce and I'll guarantee you a 100% response rate.
What's that? No Rolls Royce? You want to offer a White
Paper on the history of Zero Bias Schottky Diodes? I
think it will be a bit harder to estimate the response
rate a priori!
*** 3. THE CREATIVE FORMAT. O.K. The assignment is to
mail prospects a piece that drives them to your Web site.
We can go with a post card, a multi-fold self-mailer, a
letter, etc. It can be 4-color, 2-color, or straight
black. We can use photography, illustration, cartooning,
or go all type. It's hard to make a guess about response
rates until you know exactly what format you're using!
And that's just for starters. Other variables include
your product price, the "positioning" of your product,
the competitive situation, the time of year that you're
mailing, etc.
So now that I've thoroughly discouraged you, let me
suggest an alternative to guessing response rates . . .
Do a break-even analysis.
In other words, figure out what your total costs will
be.
This is not a number you have to guess at. You can
compute it very accurately indeed. If you want to mail to
50,000 prospects, you add up all your costs including
printing, creative, postage, list rental, etc.
Next, you compute how many leads/sales you'll need to
break even based on your product's selling price. When
you have the response rate required to break even in
front of you, you should have a good feel for whether
this rate seems achievable. This makes a lot more sense
than just guessing at response rates in the dark.
Also, let me reiterate how important testing is. If
you
want to get a handle on response rates, you have to be
able to test lists, offers, creative, etc. Where should
you start your testing efforts?
Edward Nast, the great direct response expert, said:
"The greatest differences in results can be expected
from
changes that affect the way the product is positioned.
Offer-changes run a close second, with very dramatic
changes resulting from changes in price, premium,
commitment, etc. . . . The big differences - 200 and 300
percent lift factors - almost always come from product
positioning, offer changes, or the selection of different
lists."
The take-away message this month?
It's better to test than guess. Rigorous testing requires
resources and commitment but, believe me, it's the way to
make money!
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How To Get In Touch
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Ivan Levison
Direct Response Copywriting
14 Los Cerros Drive
Greenbrae, CA 94904
Phone: (415) 461-0672
Fax: (415) 461-7738
E-mail: ivan@levison.com
Web Site: http://www.levison.com
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