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E-MAILS SENT TO HOUSE FILES FOUND TO PRODUCE HIGHEST RETURN-ON-INVESTMENT FOR SOLICITING DIRECT ORDERS
ORLANDO, FL, OCTOBER 13, 2003 -- A new landmark study from the Direct Marketing Association (The DMA) found that e-mail offers, particularly those sent to in-house customer lists, produced the highest overall return-on-investment (ROI) for marketers focusing on soliciting direct orders, generating leads or building store traffic.
"Throughout the years, The DMA has seen many developments since the days when direct marketing was mostly make up of catalog and other mail order companies," said H. Robert Wientzen, president & CEO, The DMA. "Changes in the marketplace, coupled with database technology that drive most direct and interactive marketing programs, have led to a broadening of the scope of direct marketing techniques."
According to "The DMA's 2003 Response Rate Study," E-mail marketing, with a ROI index of 14.2 for marketers driving direct order purchases, is followed by direct response television (DRTV) at 8.4, inserts at 7.3, and direct mail at 7.2.
DIRECT ORDER REVENUE AND COST BY MEDIA
DMA RESPONSE RATE SURVEY: RETURN-ON-INVESTMENT -2/
While telephone marketing and catalog pulled a higher response rate than most other direct response media, 5.73 percent and 2.32 percent respectively, both generate a lower ROI index, as labor and production fees increase the cost per contact.
Lead Generation: E-mail, telephone, and magazines proved to be the three most efficient media for generating leads. E-mail leads all media with the highest ROI index (94.4), followed by telephone (54.7), and magazine (48.4).
Store Traffic: E-mail leads in producing the highest ROI index (44.4) for traffic building efforts, closely followed by coupons (40.3), and direct mail (30.7).
Fundraising: Since most fundraisers have an ongoing flow of contributions from their donors, fundraisers have great success with each media used to their house file. However, prospecting efforts by fundraisers pulled the overall ROI indexes down. Direct mail was the most popular media used with a ROI index of 4.1, followed by telephone (3.0), and e-mail (2.9).
"Results indicate that the lines are starting to blur between direct and interactive marketing channels as they complement each other, and all appear to have particularly successful response rates and ROI indexes," said H. Robert Wientzen, president & CEO, The DMA. "The addition of catalog and retail Web sites, as well as the now common use of e-mail as a retention tool, also seem to help the successful synergy of multi-channel marketing."
Response rates for campaigns directed to customer or house file lists consistently generated a higher response then those targeting prospects. In virtually all media, campaign results were best for those targeting smaller audiences.
The DMA 2003Response Rate Study provides, for the first time anywhere, response rate benchmarks detailed by media and industry. Conducted by The DMA during the first quarter of 2003, the study measures data on more than 1,500 direct and interactive marketing campaigns. The research contains response rate information from 23 industry categories -- such as financial products & services, health services, insurance carriers/agents, manufacturing, packaged goods, retail, and travel -- broken down by purpose -- direct order, lead generation, traffic generation, and fundraising -- media, and market. Detailed information on promotional tools, free offers, shipping, rebates, and sweepstakes also are included in the study.
The full report is priced at $195 for DMA members ($395 for non-members). It can now be ordered through The DMA Book Distribution Center by calling 1.800.344.8328 (U.S.) or +1.610.461.3548 (internationally) and online at www.the-dma.org/bookstore.
The DMA is the leading trade association for businesses interested in interactive and database marketing, with nearly 4,700 member companies from the United States and 53 other nations. Founded in 1917, its members include direct marketers from every business segment as well as the nonprofit and electronic marketing sectors. Included are catalogers, Internet retailers and service providers, financial services providers, book and magazine publishers, book and music clubs, retail stores, industrial manufacturers and a host of other vertical segments, including the service industries that support them. According to a DMA-commissioned study, direct and interactive marketing sales in the United States surpassed $2 trillion in 2002, including $126 billion in catalog sales and $34 billion in sales generated by the Internet. The DMA's Web site iswww.the-dma.org, and its consumer Web site is www.shopthenet.org.