Response rate from marketing by mail?

statistical significance for marketing survey

• I plan to launch a subscription-based business this summer. In order to determine the demand curve for the service, I plan to do a simple marketing study. The study will consist of printing up brochures explaning the service, and mailing them out to prospective subscribers. Some brochures will list $10/mo, some $20/mo., $30, $40, and $50, as the price of the service. Each brochure will explain that it is a marketing effort, and to secure this price with no commitment, plus a premium (e.g., three free months of service), to call a number and leave a confirmation code. Three-part question: 1. How many brochures do I need to send out for a potential subscriber pool of 25,000? Some years ago, I researched something similar and found a nifty web-based calculation tool for opinion surveys, where the anticipated response rate, confidence level, and total population were inputs, and the output was the number of survey responses that would meet the specified confidence level. I can't find that old link, but I am really after a web tool like that, or the mathematical formula by which I can calculate it. I don't fear the math. 2. I am not a marketing person, and I really want this to pass muster in my business plan. Can you find a marketing professor that would be willing to discuss this plan for about 10 minutes to see if I am totally off my nut, or whether I'm on the right track? Preferably near Houston, Texas. 3. Eventually, I need to hire a marketing consultant to bless this plan, and offer some constructive criticism on the content of the brochure. Of course, I want to do this on a shoestring (I'm thinking two 30-minute over-the-phone consultations sandwiching some email correspondence), preferably someone in either The Woodlands (near Houston) or Houston. Can you find someone who offers that type of consultation?

• Answer:

  Hi 1. This site offers a formula for working out sample size, and you can email them to go through your calculations: http://www.ukmarketingmanagement.com/Testing___Sampling/testing___sampling.html However, other specialists are wary of using a formula due to the many different variables involved: http://publicmind.the-dma.org/enduser/group.jsp?node=22 It depends on the type of service you are offering, the persuasiveness of the brochure you send out, the price and the demand, among other things: http://www.scottish-enterprise.com/businessdev/marketing/directmarketing/faq/ Response rate can be as low as 0.1%, up to 50% (see link above). 2% is often given as a typical response rate, but depending on what you are offering, this might be way off the mark. It might be wise to consider targeting your audience more specifically. If you don't, and you take the much talked of 2% as a figure, you're looking at 1,250,000 mailings in order for 25,000 to respond. This could prove too expensive. To calculate what level of response you would require to break even, use the formula on this page: http://www.dbmarketing.com/articles/Art157.htm 2. For contact details of relevant academics at the University of Houston go to: http://www.cba.uh.edu/faculty1/marketing.htm You might be better approaching one of the lesser staff, such as a teaching assistant. Explain your situation and ask if they can help. If not, you could ask them to mention you in class, and an able marketing student might volunteer to help you. 3. To get access to a marketing consultant for a low cost why not try elance: http://www.elance.com/c/search/main/advancedSearch.pl?fpCatName=10190&rid=LLB6 Marketing consultants in Houston Brian W. Nelson http://www.thebusinesscritic.com/ Donna Fisher http://www.donnafisher.com/whois.shtml I haven't included large companies, as you'd have little chance of working with them for such a small requirement. Hopefully, this'll help you get your business up and running. Good luck with it! sim-ga P.S. If you require clarification, don't hesitate Search Engine: Google Search Terms: "direct marketing" formula "response rate" ://www.google.com/search?q=%22direct+marketing%22+formula+%22response+rate%22&hl=en&lr=&ie=UTF-8&oe=UTF-8&start=10&sa=N "university of houston" "department of marketing" ://www.google.com/search?hl=en&lr=&ie=UTF-8&oe=UTF-8&q=%22university+of+houston%22+%22department+of+marketing%22 " marketing consultant" Houston ://www.google.com/search?q=%22+marketing+consultant%22++houston&hl=en&lr=&ie=UTF-8&oe=UTF-8&start=60&sa=N