Compared to what?
Posted by: Lynne in Direct Marketing, tags: benchmark rates, Bronto, Direct Marketing, DMA, MarketingSherpa, MolecularA client asked me how her campaigns compared to industry standards. It is a common question and there are many resources available. The DMA compiles statistics and reports on response rates. Most recently they published the DMA 2007 Response Rate Trends Report. MarketingSherpa produces reports such as the 2009 E-Mail Marketing Benchmark Guide. Then, of course, there are websites offering benchmark rates for e-mails such as www.bronto.com.
Just because there are resources available does not necessarily mean that you should use them. Finding the right benchmark rate requires finding comparable campaigns. That means looking for rates based on campaigns having the same:
1. target (i.e., business or consumer)
2. channel (e.g., direct mail, print ad, web banner, e-mail)
3. industry (e.g., retail, financial services)
4. message/offer (e.g., sales)
Even if you find rates for campaigns that meet all of those conditions, how can you be sure that the campaigns are truly comparable? As noted in a recent Molecular blog post, you do not always know the context of the numbers.
The question of industry standards can also obscure another great resource, your own past campaigns. Again, you need to consider the factors above, but these will also provide a benchmark against which you can measure the success of current campaigns.
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Do these sources publish a range of response rates for a given combination of industry/target/medium/offer? The quality - or otherwise - of the creative element can surely have a large impact? I’ve always thought that provider and/or analytic companies should maintain databases of response rates from their own analyses. For an analytic company these might then be used to form priors for a Bayesian analysis of marketing effectiveness?
Craig, the DMA does provide response rates by industry, target and offer; however, the analysis is never as granular as you would want. At least, it is never as detailed as I would like!
You also raise an important issue. The quality and impact of creative is hard to quantify and not usually defined or discussed by sources of standard benchmark rates. Yet, the marketing materials are an important factor in the success or failure of a campaign. This is one of the challenges you face when performing a meta analysis of campaigns. I have thought about this from a linear model perspective and am intrigued by your suggestion of a Bayesian analysis.
Nice post.
With all the free/low cost industry benchmarks, it is surprising people still get tangled up with meaningless metrics.
[...] you can compare your metrics with? Checkout Lynne Harrold’s recent post some ideas for selecting the right benchmark. She references a variety of places to find relevant numbers for comparison including the Direct [...]