What Response Rates Can You Expect From Your Trade Show Promotions?
(Expo Magazine, May 2005)

Special Report: The DMA 2004 Response Rate Report Provides Benchmarks for Direct Marketing Response Rates, Media, Costs and ROI.
At last. An answer to the perennial questions pondered by show marketers everywhere: What response rate can I expect for my promotions? What media will generate the best response? What offers are the most powerful?

For show marketers, the highest response rates, by far, come via out-bound telephone marketing, according to The DMA 2004 Response Rate Report, published by the Direct Marketing Association (DMA, www.the-dma.org). Telemarketing garnered a 7.18 percent response for show marketers. The second highest rate was from direct mail to house files (1.23 percent, as opposed to prospecting lists), followed by email to prospects (.85 percent).

Telemarketing held the top spot for direct marketers across all industries, generating a response rate of 5.78 percent overall among "direct order" campaigns, meaning those intended to drive an immediate results, like a purchase or registration. In second place was the 2.3 percent reported for dimensional mail, which includes three-dimensional mailings, videotapes, audiotapes, diskettes and promotional items. A close third was catalog mailings, at 2.18 percent. Direct mail averaged 1.88 percent, coming in fourth across all industries.

It’s no surprise that telephone, a highly intrusive medium, would lead the pack in terms of response rates. But it’s interesting that the phone also proved to be the most efficient, despite its relatively high cost. Show marketers reported a cost per contact of $8.95 on telephone campaigns to house names, compared to only $.39 for house-file direct mail. But the phone ultimately netted a lower cost per order, at $128.32, compared to $151.43 for direct mail. The phone campaigns also delivered a healthy return of 19 times sales-to-expense ratio for show marketers.

How the DMA Study is Organized
To compile the data, the DMA collected input from 1,406 marketers across all industries about their 2004 campaign results: quantity, cost, response, and revenue generated. They then sorted the results by media and also break them out by industry.

This is the second annual Response Rate Report published by the DMA, and they plan to revise it each year going forward.

The study reports response rate data on 12 communications media, both addressable media and those that communicate anonymously. Among the addressable media were direct mail, dimensional mail, catalogs, email, telephone and inserts. Non-addressable media included coupons, newspapers, FSIs (the free-standing inserts often found in Sunday newspapers), magazines, direct response television and radio.

Show marketing is reported under the general sector of education, which included 42 campaigns. Of these, 9 campaigns were submitted from trade show, conference and seminar companies. Most of these marketers reported using multiple media, primarily direct mail, phone and email. A few also communicated through catalogs, inserts and radio. However, the quantities in these media are so small as to be statistically unreliable for analysis. Surprisingly, no show marketers reported using dimensional mail, magazine advertising or coupons.

Response Rates and ROI By Medium
While telephone, dimensional mail, catalog and direct mail were the leaders in response rates across all industries, the worst performing media for direct order campaigns were direct-response television, newspaper advertising and radio, with response rates at .1 percent or less. These rates were very similar to those reported by medium in the 2003 study.

Considering the question of profitability, telephone was not only the highest responder but also the most efficient medium for all direct marketers, delivering an ROI index of 42.4 in 2004. The power and productivity of the telephone is very likely influenced by the institution of the Do Not Call regulations, which have resulted in a smaller, more targeted universe of customers and prospects for this medium.

The next most profitable direct order medium was email, which reported an ROI index of 16, and dimensional mail, which indexed at 15.3. For show marketers, email also delivered an ROI index of 16. Dimensional mail may be an area of opportunity for show marketers to explore.

In terms of revenue per contact for direct order marketers, telephone led the list, delivering $45.37. Next most productive was dimensional mail, at $14.16 and direct mail at $11.36. Direct response television and radio produced the lowest revenue results per contact, at less than 10 cents each.

Other Trends of Interest
Direct marketers also reported a number of other useful campaign results data in the 2004 study. No surprise, house file campaigns generally out-pulled prospecting efforts. But the gap between them narrowed from 2003 to 2004, probably due to an increase in the number of generic campaigns included in the 2004 numbers. Oddly, telephone campaigns reported nearly identical results between house and rental files, at 2.75 percent and 2.41 percent respectively, reflecting the intrinsic power of a voice-to-voice communication.

Consumer marketers reported response rates generally even with their colleagues in B-to-B, no doubt due to the relatively high proportion of lead generation campaigns used by business marketers. Lead generation campaigns tend to report higher response rates than direct order efforts. B-to-B marketers in the direct order category reported an overall response rate of 1.75 percent, compared with the B-to-B lead generation rate of 3.4 percent.

Comparing 2004 to 2003, the trend is positive. Trade show marketers reported vastly improved response rates in each of the three key media. Direct mail and email improved by 211% and 150%, respectively. Telephone response rates increased by a factor of 6.3, from 1.13% to 7.18%, albeit on a very small sample size.

Across all industries, year on year, direct mail and email improved slightly, but telemarketing held steady. Considering this overall trend, the strong improvement in telemarketing experienced by the trade show industry is a standout.

Other Results
Recognizing that offers have a major impact on campaign success, the DMA Response Rate Report also queried contributors about the relative lift provided by various types of offers. The offer most widely used across the entire study was a sale or discount. The second most popular offer was some kind of free gift.

In the education category, where trade shows appear, the same top offer was reported, but second in popularity was a free sample or free information offer. The most powerful offer, in terms of lift and the most widely used for this category was the discount offer.

Finally, the DMA asked participants to name the communication channels used by customers and prospects for their replies. Across the entire study, the most popular campaign response channel was telephone, reporting usage in 28.7 percent of the cases. Second was mail, with 21.8 percent, and third was a website, with 20.8 percent of the activity. The popularity of the web as a response vehicle had increased dramatically from 2003, when it represented only 15.8 percent. In the education sector, response channel usage held quite steady year on year.

Implications for show marketers
While the DMA study does not contain enough data in the trade show industry to be entirely conclusive, the report as a whole provides some intriguing directions that show marketers might well explore, among them:

  • Take more advantage of telemarketing. As the most productive communications medium for show marketers, in terms of both response rate and ROI, telemarketing was largely underutilized for audience acquisition. Marketers might do well not only to increase the use of telephone but also combine it with direct mail and email, in an integrated, multi-touch program.
  • Experiment with dimensional mail. An expensive medium, dimensional mail is easy to dismiss as too rich for a show campaign budget. But given its reported 15 times revenue-to-expense ratio for direct order marketers, the medium holds considerable promise for trade shows. Proven to get past gatekeepers to the executive suite, dimensional mail may be best applied to shows targeting senior-level audiences.
  • Don’t put all of your eggs in the email basket. Email continues to perform well overall for direct order marketers in aggregate, with a response rate of 1.12 percent, a cost of $.10 per contact and an ROI index of 16. But for show marketers, the picture is mixed, with email response rates hovering at a mere .14 percent.
  • Try more free-gift offers. While this offer category did perform well for show marketers, it is relatively underutilized and deserves additional attention.
  • Make sure your website offers easy and convenient registration. As the web increases in popularity as a response medium, show marketers should take advantage.

So if you have been wondering how your campaigns stack up against the rest of the industry, these figures provide the beginnings of some useful benchmarks. Keep in mind that nine campaigns are insufficient to draw final conclusions about the entire picture for show marketers. A full copy of the report is available for $395. Contact The DMA at www.the-dma.org/bookstore/.

Figure 1: 2004 response rates by communications medium
[pick up entire chart, top of page 34]

Blurb: Notice that most media experienced wide swings in response rate. Averages are just that—average.

Sidebar: Response rates by medium for conferences, trade show and seminars, 2004

Media List Source Response Rate % Cost Per Contact Cost Per Order
Direct Mail House 1.23 $0.39 $151.43
  Prosect 0.72 $0.43 $352.35
  Total 0.76 $0.40 $288.64
Email House 0.28 $0.23 $48.16
  Prospect 0.85 $0.35 $542.60
  Total 0.14 $0.21 $209.57
Telephone House 7.18 $8.95 $128.32

Despite its relatively high price, telephone marketing is the most efficient communications medium for show marketers.

Figure 5: Response rates by medium for conferences, trade show and seminars, 2003

Media List Source Response Rate % Cost Per Contact Cost Per Order
Direct Mail House 1.42 $0.70 $198.32
  Prosect 0.21 $0.40 $343.72
  Total 0.36 $0.58 $395.41
Email House 0.09 $0.05 $175.45
  Prospect 0.02 $0.21 $940.00
  Total 0.09 $0.06 $206.42
Telephone House 1.13 $0.75 $66.67

 

Media List Source Response Rate % Cost Per Contact Cost Per Order
Direct Mail
House
 1.42 $0.70 $198.32

Prospect

 0.21 $0.40 $343.72
Total
 0.36 $0.58 $395.41
Email
House
 0.09 $0.05 $175.45
Prospect
 0.02 $0.21 $940.00
Total
 0.09 $0.06 $206.42
Telephone
House
 1.13 $0.75 $66.67

In 2003, the first time the DMA compiled response rates, direct mail was significantly less efficient a medium for show marketers than in 2004.

Figure 3: How trade show response rates stack up against other industries.

Media Trade Shows, Conferences, and Seminars Education Sector All Industries
Direct Mail
0.76%
 2.42% 1.88%
Email

0.14%

 1.14% 1.12%
Telephone
7.18%
 3.61% 5.78%

Show marketers are generating excellent results using the telephone, but underperforming in direct mail and email, their other key communications media.

Figure 6: Trends in response rates across all industries.

Media 2003 2004
Direct Mail
1.61%
 1.88%
Email

0.99%

 1.12%
Telephone
5.73%
 5.78%

While direct mail response rates improved slightly, email declined, and telemarketing held steady year on year.

Figure 7: Offer usage and results in the education sector

[Pick up chart 3h-4, page 156]
Free gift offers work well for show marketers, but are not used as often as free information offers.

Figure 8: Channels of customer response in the education sector

[pick up chart 3h-5, page 156]
The increasing popularity of the Internet as a response channel indicates opportunity to save time and money.