Break-Even Response Rate
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 $0.91 each = $1,820. Average job revenue is $400. Break-even response rate = $1,820 / (2,000 × $400) = 0.2%. Industry-typical response rates are 2–3%, so the campaign clears break-even by 10–15x.
Related terms
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Related on PostKnock: Work it out for your own list: ROI calculator · direct mail response rate benchmarks. The postcard marketing ROI guide lists every cost line to include before you calculate it.
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