Q: What is average industry response rate for a university continued education house mail list? Also, what is expected response rate for purchased mailing list of residences / businesses in best carrier routes?
A: This is a question that LERN receives regularly. The response from a mailing or depends upon the product or service, the copy used, how your program information is presented, the payment options, the appearance of the brochure, the date or time of season, the general economic conditions of the country at the time, Institution name recognition, program recognition, and so on.
It is also important to take into account how much you charge for a course. You might get a very .5% response rate to a mailing for a program that costs $5000, but you need very few registrations to make the course profitable. On the other hand, you might get an 8% response rate if you are offering courses priced @ $100 or less, but you will need a lot more people in order to make these courses successful. If you average the response rates you get from these two mailings, you will get a number that is pretty meaningless in terms of making a decision.
We do know that mailing to targeted lists and to your internal house list is a great deal more efficient than a general mailing, sometimes as much as six to eight times as greater, in fact. It is important for you to benchmark your response rates when you mail to these lists so that you can track your performance over time and monitor any changes in response rates.
What you really need to do is benchmark your response rate against your own performance goals. This means that you should look at the LERN financial formula and meet those criteria.
Here are the benchmarks:
Promotion costs should not be more than 10-15% of income from the course or courses you are promoting. If your promotion costs exceed this number then you will have difficulty being financially self-sufficient.
Your other direct costs are production costs. These should be 35-40% of your income. This is primarily made up of instructor compensation and any other costs you pay to provide a course.
These two expenses should not be more than 50% of your total income from the course or courses you are promoting. The remaining 50% of income is then what you have left for your general and administrative expenses and any surplus you have budgeted. Using this strategy, your financial performance solid, and your response rates are of secondary importance.