Monday, May 17, 2010

Comparing Results to Industry Norms

I am frequently asked about what response rate a client should expect based on 'industry standards' or results from similar programs at other financial institutions. While the DMA does compile statistics and reports on direct marketing response rates with their Response Rate Trends Report, and there are other tools available from alternative sources such as MarketingSherpa, there are significant flaws to using general standards or even the results from another bank's program as a guide for setting expectations.

It is difficult to find comparable benchmark results since you will need to find programs with the same or similar:
  • Target audience
  • Product features and benefits
  • Offer
  • Channel mix (were there other marketing channels used to support the program)
  • Timing (not only to reflect seasonality, but overall environment conditions at the time of the program)
  • Brand strength
  • Competition
After more than 30 years of marketing services experience within the banking industry, I have found that the best benchmark against which you can measure the success of a current or future campaign is the results from previous programs at your financial institution. While the timing of the previous program may be different, far more of the variables described above stay the same. Sometimes developing this benchmark may require analyzing a program that had not been previously measured, but this guidepost will be far more accurate than an industry or competitor result.

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