The minimum response rate at which campaign revenue covers campaign cost — below this, you lose money.
Definition
Break-even response rate is the minimum percentage of recipients who must respond for a campaign to pay for itself. The formula is: campaign cost ÷ (number mailed × revenue per response). It's the floor — anything above it is profit, anything below it is loss.
Why it matters
Knowing your break-even rate before you launch is essential. If your break-even is 2% and your industry's typical response rate is 5%, the campaign is a strong bet. If break-even is 8% and typical is 3%, the campaign needs better economics — a stronger offer, a higher-value product, or a cheaper format.
Example
A plumber mails 2,000 postcards at $0.79 each = $1,580. Average job revenue is $400. Break-even response rate = $1,580 / (2,000 × $400) = 0.2%. Industry-typical response rates are 2–3%, so the campaign clears break-even by 10–15x.
Related terms
- Return on Investment — The ratio of revenue generated to total campaign cost — typically expressed as X:1 or a...
- Direct Mail Response Rate — The percentage of mail recipients who take the desired action — call, visit, scan a QR ...
- Customer Lifetime Value — The total revenue a typical customer generates over the entire time they remain a custo...
- Postcard Marketing — A direct mail strategy using postcards — uncovered, single-piece mailers — to reach cus...
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