Unfortunately, there is no magic formula for predicting an average, or typical, response rate. There are hundreds of variables connected with any mailing -- millions if you consider that each person receiving the message is a variable. Many sources quote that 2% is a typical direct response rate. However, this number is quite meaningless. Response rates vary widely depending on a number of factors :

• The Medium (direct mail, space)
• The Product (insurance vs. crystal vases)
• The Offer (inquiry vs. free trial vs. cash-with-order)
• The Price ($500 vs. $9.95)
• The List (customer vs. prospects)

Normal response can easily vary from 0.1% (not unusual in insurance or offers in print media) to 50% or more (when very targeted, relevant mailings are sent to long-standing customers).

The important thing to remember is that the key element in the P&L is the promotion cost per response and what it represents out of the contribution available. CPM and response rates are important, but the most important number is the relationship between the two -- cost per response and how it fits into the P&L worksheet.

Leading marketing industry body, the Australian Direct Marketing Association (ADMA) has called on businesses to better understand their legal obligations in relation to the collection and use of customer data for marketing purposes, in its bid to help improve compliance levels across Australia. 

The call comes as businesses face increasing pressure from Government and consumer groups to help stop email spam and unwanted telemarketing calls in particular, and coincides with a review of the Privacy Act, currently being undertaken by Privacy Commissioner, Karen Curtis. 

ADMA Chief Executive Officer, Rob Edwards, said: 

“ADMA members already follow a strict Code of Practice in relation to the use of customer data for marketing purposes and are continually kept up to date by ADMA of any legislative or best practice changes in relation to data privacy. 

Unfortunately, there are many companies outside of our membership, particularly small to medium sized businesses that are completely unaware of their legal obligations. Furthermore, with the introduction of the Spam Act earlier this year, and the proposed changes to national telemarketing legislation, this needs to be urgently addressed.   

We need all companies to comply with the legislation, no matter what their size or business sector, to ensure a fair balance is maintained between business needs and consumer protection and privacy.” 

To find out more about becoming an ADMA member, please call ADMA on 02 9368 0366.