Direct Mail ROI Calculator
At what response rate does a mail drop pay for itself, and what return does it make?
Enter how many households you mail, how they respond to the first drop, how much of that response each repeat drop keeps, and the economics of a piece. Households that respond stop getting mail. The calculator shows how many drops pay for themselves. The starting values are an illustrative example, not a benchmark.
Blue drops respond above the break-even rate and earn more than they cost; grey ones lose money. The share of response each repeat keeps depends on the gap between drops, so measure it at the spacing you use, and test other spacings before changing it. Enter margin per funded loan for profit you keep. Every response is counted as caused by the mail; a holdout group that skips the extra drop shows what it really adds.
A second piece can remind a household that ignored the first, but each repeat drop to the same people responds less than the one before. This calculator follows a mail sequence drop by drop: households that respond leave the list, each repeat keeps a share of the previous drop's response, and a drop is worth sending only while it responds above the break-even rate. Use it to see how many drops a sequence should have, what each extra drop adds and when the next one would lose money.
The first drop goes to every household in the sequence. Households that respond leave the list, so each later drop goes to the households that have not responded yet. Each repeat drop keeps a fixed share of the previous drop's response rate, measured at the spacing you use now; a different gap between drops changes that share. Each drop earns the households it reaches times (response rate × share of responders who fund × value per funded loan − cost per piece). A drop is worth sending when its response rate is above the break-even rate, the cost per piece divided by the value of a responder; because response only falls from drop to drop, sending every drop above break-even is also the sequence with the highest total profit. Every response is counted as caused by the mail.
Working through this decision for your business?
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