The Puzzling, Frustrating 1 Percent Response Rate
For this inaugural article, no rule of thumb could be better to start with than the oldest, strangest, most puzzling and often the most frustrating rule of them all: the 1 percent response rate.
Definition: 1 Percent Response Rule
Most catalogers have at least heard of this rule, but I’ve never seen a really careful definition of it. So here’s my precise definition of the 1 percent response rule:
The 1 Percent Response Rule: If you mail an average-size catalog, with merchandise of average desirability, at average-value price points, to an average selection of response lists, then your average response rate (number of orders received, divided by number of catalogs mailed) will be 1 percent.
Where did the 1 percent response rule come from?
To the best of my knowledge, there is no theoretical foundation for the 1 percent response rule—no psychological, sociological, economic or business reasons for it. The rule exists simply because catalogers see it happen over and over and over again. Actually, it’s surprising that such a widely recognized rule should have no theoretical justification. But it doesn’t. It just is.
How can you apply the rule to your catalog?
Before you can use the 1 percent response rule in your catalog business, you will need to modify it wherever its assumptions deviate from the realities of your business. To see how that’s done, we’ll examine each of the assumptions on which the 1 percent response rule is based:
“Average-size catalog.” This means generally between 24 and 32 pages. If your page count is much less (such as the 12- or 16-page catalogs that startups sometimes launch), your response rate from response lists will be lower—not vastly lower, but lower. And conversely, if your page count is higher, your response rates will be somewhat higher—not vastly higher, but somewhat.