market research -response rates (3)

[Industry Average Metrics] July 13, 2012

[Motorola Solutions Canada, Inc.] | Industry Average Metrics |2012 1

INDUSTRY AVERAGE METRICS FOR

MARKETING CAMPAIGNS

Written by Derek Arcuri,

Enterprise Sales Intern

Motorola Solutions Canada, Inc.

July 13, 2012



MARKET RESEARCH: INDUSTRY AVERAGE METRICS

Executive Summary: For the purposes of determining Industry Benchmarks, research has been conducted to

determine industry average open rates, response rates, opportunity generation rates etc. (see table below) for

marketing campaigns in which Motorola Solutions has either implemented or is under consideration. This

paper predominately consists of quantitative data and little qualitative data. Due to inestimable variables that

influence the metrics, judgment should always be used when consulting this data. This paper is sourced using

MLA citation.

Objective: Determine industry average metrics for various marketing campaigns. Below is the guide breakdown

of this paper.

Types of marketing campaigns Metrics found

Email campaigns Contact reach rates

Mobile campaigns Open reach rates

Direct Mail campaigns Click Through Rates (CTRs)

Telephone campaigns Response rates

Print/banner campaigns Opportunity Generations rates

White papers Lead qualification rates

Webcasts Close rates

EMAIL MARKETING

A net new list – acquired and emailed for the first time – yields a 4-8% open rate and 10-20% bounce rate (The

Challenge of Open Rates in B2b Email Marketing, 2011)

Prospecting emails to fresh lists typically get open rates of 9%-15% and CTRs of 2.8%-3.2%. Marketo views open

rates of 16%-20% as top performers. The average CTR per Marketo is 2.1%-5% with 5.1%-10% viewed as top

performers. (Gospe, 2012)

A newsletter to a B2B house list is getting open rates of 18%-22% and CTRs of 3%-11%. This is coherent with

Marketing Sherpa’s 2010 Email Marketing Benchmark Report in which 1,500 survey respondents reported an

average open rate of 23% for B2B newsletters and an 11% CTR. (Gospe, 2012) Please refer to Appendix A for a

comparison between B2B and B2C results yielded from newsletters.

A non-profit organization sends a monthly newsletter to its house list and sees open rates of 25%-30% and

CTRs of 4%-6%. Follow-up emails to webinar or event attendees get much higher results with one example of

an open rate of 31% and CTR of 55%. (Gospe, 2012)



Email to a house list averaged a 19.47% open rate, 6.64% click-through rate, 1.73% conversion rate, with a

bounce-back rate of 3.72% and an unsubscribe rate of 0.77% (DMA Releases 2010 Response Rate Trend Report,

2010)

Email response rates are contingent on numerous variables. They vary by industry, the brand’s mindshare, and

whether the emailing list is a rented list, media subscribers or the campaign organizer’s own house list.

Please refer to Appendix B, expanding on B2B Email Open Rates, CTRs, Click-to-Open Rates, and Bounce-back

rates organized by industry. (Hogan, 2012)

Below are key statistics for the High-Tech industry. Appendix B summarizes the difference between the three

ranges (green: best-in-class range, orange: average range and red: laggard range), which justifies the large

standard deviations from the data below.

I.e. High-Tech Industry

10% – 62% open rates

1% - 20% CTRs

7% - 53% Click-to-Open Rates

0.1% - 2.5% Bounce-back Rates

The table below shows how the size of the business yields distinct results.

Size of Business Open Rates CTRs Click–to-Open Bounce-back Rates

Large Businesses 14.4% 3.2% 22.2% 2.5%

Small Businesses 10.3% 1.9% 18.4% 1.5%

(Customer Experience Matrix, 2012)

Appendix C shows how results are achieved by segmenting email list versus blind email campaign. Canada anti-

spam legislation states that it is unlawful to send emails to recipients that have not opted to receive them.

(Canada's Anti-Spam Legislation, 2011) Therefore, the segmented column should be considered for Canadian

recipients.

Appendix D shows the mean figures for each survey. The mean of means has been calculated, located in the

lowest row (excluding Silverpop because it did not break off B2B from B2C). As it happens, the averages fall

within the Signup.to and Eloqua figures. (Customer Experience Matrix, 2012)

Please refer to Appendix E for email benchmarks and trends with respect to campaign size.

Please refer to Appendix F for Epsilon’s trends of non-bounce, opens and click-through rates for emails broken

down from Q4, 2009 to Q4, 2011.



MOBILE MARKETING:

Studies indicate that SMS is typically read by 97% of mobile subscribers within an average of 15 minutes after

receipt, and responded to within 60 minutes. While 65% of e-mail is spam, less than 10% of SMS is spam.

Mobile communication has a 97% open rate, unparallel to email which typically reaches 20%. Studies indicate

that 84% of mobile subscribers are never more than 10 feet from their mobile device.

A Nielsen study found that more than half of mobile data subscribers (51%) who saw a mobile ad responded to

it by sending a text-message, clicking on it, or calling a specific number. 88% of all mobile subscribers have a

text enabled phone. 51% have received SMS marketing messages, and 25% have opted in to marketing

messaging from a brand. (Mobile Marketing for B2B Firms, 2012)

DIRECT MAIL MARKETING

One study found that the response rate for a B2B marketing campaign is 2% for new clients and 7% for existing

clients. A direct mail campaign offering a white paper will generate roughly twice the response of a seminar

invitation on the same topic. A survey invitation generates much higher response rates compared to a free trial.

All can be used as direct mail offers; nonetheless, there is no precise “average” direct mail response rate as

response rates vary widely depending on what you’re asking the recipient to do. It is for this reason that

industry benchmarks for metrics are rather ambiguous. (Sewell, 2010)

Lead Generation from Direct Mail equates to 0.71% according to a study done by Canada Post located in

Appendix G. (Marketing Research Fact Sheet: Media Response Rates, 2009)

Responses to Direct Mail have remained constant over the past four years. Letter-sized envelopes, for

instance, had a response rate this year of 3.42% for a house list and 1.38% for a prospect list. Catalogs had the

lowest cost per lead/order of $47.61, just ahead of inserts at $47.69, email at $53.85, and postcards $75.32.

Response rates for B-to-B campaigns were generally higher than for B-to-C campaigns. Lead generation and

high-end average sale campaigns also had higher response rates. Nearly 60% of direct mail campaigns in

financial services aimed to produce a direct sale. The average response rate was a comparatively low 2.66% to

a house list and 1.01% to a prospect list. (DMA Releases 2010 Response Rate Trend Report, 2010)

Direct Mail Industry Averages

Response Rate = 1-2%

According to the Direct Marketing association,

average direct mail responses for B2B were 1.38%

as of June 2010.

Results from Profitworks’ Direct Mail Study

Pieces Sent using Direct mail = 2,762

Responses = 7 out of 2,762

Response Rate = 0.25%



Customer(s) acquired = 1

Revenue from customer(s) = $750 per year

Direct mail cost = $600

Net Profit = $150

Year 1 ROI = 25%

Payback = 10 months

For this particular scenario, direct mail is a great investment as payback on their investment can be achieved in

under a year. Also, responses continued from the campaign up to about 8 weeks past the drop date (Keller,

2011)

TELEPHONE MARKETING

According to a study by Canada Post, the response rates and lead generation rate for a telephone marketing

campaign is 9.11% and 2.44% respectively. (Marketing Research Fact Sheet: Media Response Rates, 2009)

Outbound telemarketing to prospects had the highest cost per order or lead of $309.25, but it also had the

highest response rate from prospects of 6.16 %. The highest response rate for a house list was also telephone,

at 10.41%. (DMA Releases 2010 Response Rate Trend Report, 2010)

Based on 200 B2B technology companies with a direct telemarketing cost of $50k - $300k and no additional

marketing support, 12 - 14 out of 100 out-bound calls will be meaningful. Of the 12% - 14% meaningful

conversations, 3.5% - 5% of those convert into feasible sales opportunities. A typical close rate is approximately

20% - 30% of the 3.5% – 5% feasible sales opportunity. (Lang, 2011)

100 activities per day/500 week/2000 month

12% - 14% conversation rate = 240 - 280 conversations per month

3.5% - 5% lead rate = 8 - 14 qualified leads (240-280 X 3.5%-5% = 8-14)

25% close rate on qualified leads = 2 - 3.5 deals closed per month on a $50k - $300k investment.

PRINT AND BANNER MARKETING

A study has been conducted at the Rochester Institute of Technology to measure the visit and response rates

using personalized URLs sent to recipients using direct mail. (Brown, 2009)

The sample size included a random selection of 670 cross-media campaigns across 27 vertical markets.

Results: For the 670 campaigns analyzed, the overall average and median response rates are as followed:



Rates Visit Rate Response Rate

Mean 5.10% 3.28%

Median 1.71% 0.92%

(Brown, 2009)

Visit Percent Response Percent

Low High Low High

4.4% 5.8% 2.7% 3.9%

95% confidence interval

Visit rate: the percentage of total number of recipients who visited the personalized URL sent to them via the

campaign.

Response rate: the percent of total recipients who submitted their info upon visiting the personalized URL.

Median: the middle number when sorted in a numerically ascending list.

Interpretation: Results for 95% of campaigns will fall within this range. (Brown, 2009)

The graph below summarizes the various visits and response rates by vertical market industry revealed by

Rochester Institute of Technology.

Vertical Market Visit Rates Response Rates

Insurance 13.88% 11.85%

Manufacturing 13.20% 10.70%

Retail 8.48% 6.74%

Non-for-Profit 7.69% 74.52%

Other trades and services 7.08% 4.18%

In the last few years, customized, personalized marketing campaigns have been posting strong results

compared with traditional, static campaign styles. Regardless of vertical market or business descriptive, well-

designed and well-executed personalized marketing campaigns demonstrate their ability to outpace the

competition. (Brown, 2009)



CONTENT PUBLISHING

Twitter is the most popular social media channel for content marketers. Every social media channel is seeing

increased adoption by 15-20%. Article posting and social media (excluding blogs) are the most popular tactics

and are currently used by 79% of B2B marketers (Pulizzi, 2011)

SEARCH ENGINE OPTIMIZATION

Paid search had an average cost per click of $3.79, with a 3.81% conversion rate. The conversion rate (after click) of internet display advertisements was slightly higher at 4.43%. (DMA Releases 2010 Response Rate Trend Report, 2010)

The open rates of Application Briefs, Whitepapers, Spec Sheets etc. are depended on the medium of how they

are delivered to the recipient; i.e. Search Engine Optimization, email marketing or social media vehicle. John

Moore from Sirius Decision writes:

“Below are the median (most cited) response rates for the tactics that Sirius Decision tracks:

white papers: 3%

banner ads: 1%

webcasts: 5%

e-mail: 3%

direct mail: 2%

These are aggregations of disparate numbers that depend on various factors such as targeting and

segmentation, messaging, prospect vs. customer, single vs. multi-touch campaigns etc.” (Moore, 2012)

Consumption metrics, sharing metrics, lead metrics and sales metrics are used to track the success of white

papers, spec sheets and case studies. Consequently, a white paper would likely have a consumption ratio,

sharing and lead metrics, but not sales metrics because it cannot be directly tied to a sale. A case study might

have consumption ratio and sales metrics, but not the other two (Pulizzi, 2011)

On average, 3% of SEO website visitors complete a registration form on the webpage. (Forward to a Colleague,

2009)

GENERAL CLOSE RATES

The minimum acceptable close rate for leads provided to sales in a complex selling situation (long sales cycle

and multiple decision-makers) 4.3%, based on 100,000 raw leads, across about 50 companies in various

segments from the tech industry from the last 10 years. (McDade, 2010) In a typical sales situation with long

sales cycles in a saturated market, there are often 3 suspects to 1 prospect, 3 prospects to 1 qualified

opportunity, and 3 qualified opportunities to 1 win (McDade, 2010).

According to a Profitworks’ study, the Technology industry benchmark close rate is 40% (Keller, 2012)



CONCLUSION:

Every successful marketing campaign has a positive correlation to the organization’s profitability. The slope of

that correlation depends on many variables that may yield or hinder the success of the organization.

Email campaigns are the dominate marketing campaign amongst enterprises. Larger enterprises with stronger

mindshare will typically have a higher open rate. The email’s content, among other variables, depict whether

the close rate is favourable for an organization seeking a direct sale. Canadian enterprises must abide by

Canadian Spam laws, prohibiting unsolicited emails or SMS to recipients that have not opted to receive them.

Mobile marketing campaigns are seeing an increased adoption due to superior response rates. Accounting for

Canada’s anti-spam law, SMS marketing campaigns will see a higher response rate because the recipient has

opted to receive them and thus is expecting it.

Responses for a direct mail marketing campaign is contingent on what the recipient is asked to do. Thus far,

direct mail is the most expensive campaign but may not be the most expensive per lead. Depending on the

scenario, the high customer generation rate may offset the marketing cost. We see in the example on page four

and five that the return on investment is positive.

Telephone marketing amongst businesses yield a higher conversation rate than consumer telemarketing. While

some argue that it is the most cost-effective way to yield a direct sale, a lead generation is contingent on the

scenario.

Print marketing has many approaches to tracking metrics. It is challenging to track the number of your target

market who has viewed your banner. The study on page six tracked the response metrics by sending parcels of

print banners to recipients that are then asked to visit a personalized URL. The study did not state what

incentivized the recipients to visit the URLs, yet the incentive is a considerable variable that can skew results.

More popular amongst B2C businesses, content publishing is increasing in adoption because of trend towards

leveraging a social media vehicle to gain market traction. The value that the content brings to the reader and

target audience is critical to the success of the campaign. Search engine optimization is a low cost approach to

market a product and service. Given that e-business is a saturated market, it is often emphasized that

unconventional content that augments value, is essential to win your target audience’s attention.

In conclusion, the data in this paper is subjective and serves as a benchmark and is intended for Employees of

Motorola solutions’ Canadian enterprise team.



APPENDIX A

(Gospe, 2012)



APPENDIX B

Reference: Eric Hogan from Motorola Solutions



APPENDIX C




APPENDIX D

(Customer Experience Matrix, 2012)



APPENDIX E




APPENDIX F

(Email Campaign Volumes Surge, Open Rates Stronger, 2012)



APPENDIX G

(Marketing Research Fact Sheet: Media Response Rates, 2009)



References

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"Canada's Anti-Spam Legislation." Government of Canada. N.p., 30 Nov. 2011. Web. 12 July 2012. <http://fightspam.gc.ca/eic/site/030.nsf/eng/home>.

"The Challenge of Open Rates in B2b Email Marketing." CRM Software Blog. N.p., 18 Jan. 2012. Web. 12 July 2012. <http://www.crmsoftwareblog.com/2012/01/the-challenge-of-open-rates-in-b2b-email-marketing/>.

"Customer Experience Matrix." : B2B Email Benchmarks: Answers Vary Widely. N.p., 15 Apr. 2012. Web. 12 July 2012. <http://customerexperiencematrix.blogspot.com/2012/04/b2b-email-benchmarks-answers-vary.html>.

"DMA Releases 2010 Response Rate Trend Report." DMA Releases 2010 Response Rate Trend Report. N.p., 15 June 2010. Web. 12 July 2012. <http://www.the-dma.org/cgi/dispannouncements?article=1451>.

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"Forward to a Colleague." Lead Gen Overhaul: 4 Strategies to Boost Response Rates, Reduce Cost-per-Lead. N.p., 08 Oct. 2009. Web. 12 July 2012. <http://www.marketingsherpa.com/article.php?ident=31384>.

Gospe, Mary. "2012 B2B Email Response Rates and Best Practices." 2012 B2B Email Response Rates and Best Practices. N.p., Jan. 2012. Web. 12 July 2012. <http://kickstartall.com/documents/KS_Articles/EmailMarketingTrendsResponseRates_January2012.html>.

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Keller, Chris R. "Small Business Direct Mail." Profit Works. N.p., 21 Mar. 2011. Web. 12 July 2012. <http://www.profitworks.ca/blog/169-small-business-direct-mail>.

Lang, Chris. "What Is the Average Conversion Rate for an Outbound Telemarketing Campaign?" Quora. N.p., 11 Apr. 2011. Web. 13 July 2012. <http://www.quora.com/What-is-the-average-conversion-rate-for-an-outbound-telemarketing-campaign>.

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"Mobile Marketing for B2B Firms." Strategic Growth Concepts. N.p., n.d. Web. 12 July 2012. <http://www.strategicgrowthconcepts.com/marketing/mobile-marketing/mobile-marketing-for-b2b-firms.html>.

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