Why Your Response Rate Might Be Amazing

Key Topics:

Why Benchmarks Can Be Misleading

What Actually Matters (Hint: It’s Not Response Rate)

Typical Response Rate Ranges

When a Low Response Rate Is Great Performance

When a High Response Rate Is Bad Economics

The Hot Take: Stop Chasing Numbers, Start Managing Systems

The Real Question You Should Be Asking

If you’ve been working in direct mail or any field of marketing adjacent to direct response, you have probably asked yourself, “what’s a good response rate?”

It’s a gnawing question that points to our desire to have benchmarks that are concrete, easily measured, and against which we can judge ourselves and justify our performance to others.

In direct mail, response-rate benchmarks are often misleading at best.

Let’s talk about what actually matters.

Benchmarks pretend that all campaigns are comparable; They aren’t.

An acquisition postcard sent to a cold list of potential new donors is not the same as a reactivation letter sent to lapsed or LYBUNT donors with a long history of giving.

Sadly, response rate benchmarks lump all performance together in the search for one cohesive number that explains all.

Benchmarks collapse complexity into a single number. But direct mail performance depends on dozens of variables, including:

• Audience (house file vs. prospecting)
• Ask strategy (soft vs. aggressive)
• Gift array
• Offer (premium, match, emergency, etc.)
• Channel integration (mail-only vs. multi-channel)
• Frequency of mailing
• Long-term donor value

When someone says, “A good response rate is X%,” the only honest answer is: “For what?”

A 2% response rate to a $15 acquisition package is very different from a 2% response rate to a year-end appeal mailed to your best donors.

Benchmarks ignore context. And in nonprofit fundraising, context is everything.

More importantly, sometimes a great response rate is 0% if the goal of the piece is long-term cultivation, stewardship, or priming – and for many of your pieces, those are and should be laudable goals.

Response rate is not meaningless, but it’s not the most important metric.

Here are the metrics that deserve more attention:

1. Return on Investment (ROI)

Did the mailing generate more revenue than the cost? Is this true over 90 days? 6 months? One year?

A piece that is cash-flow negative in the short term can have outstanding ROI over 5 years. For example, a cold list that costs $10,000 to mail could acquire one new donor that gives $250 in their first year, $500 in their second year, $2,500 in their third year, $5,000 in their fourth year, and $10,000 in their fifth year of giving to the organization. This happens more often than you would think.

A “low” response rate can still have excellent ROI if average gifts are sizeable, donors give more than last time and more and more over time, and/or mailing costs are controlled.

2. Cost Per Dollar Raised (CPDR)

How much did it cost to raise each dollar? Many nonprofits would gladly accept a lower response rate if it improved CPDR from $0.95 to $0.70. A client once mailed prospects a laptop case with the promise of giving them the laptop to go with it if they booked a meeting. That’s a great way to increase conversion rates, but maybe not a great way to improve CPDR.

3. Lifetime Value (LTV or CLV)

What is the donor worth over time? What is their churn rate? What is their churn rate if you intervene?

This is where response-rate obsession really breaks down. A prospecting campaign with a 0.5% response rate can be outstanding if those donors renew at high rates, upgrade over time, and keep donating for a while.

CLV (customer lifetime value) or LTV (lifetime value) is measured by taking the average gift size, multiplying it by the frequency of giving, and multiplying that by the average lifespan. Check out our post about CLV in non-fundraising contexts here.

Donor churn – defined as the number of donors who stop giving every year – has a huge impact on your donor’s lifetime value. The average annual gift size at two different organizations may be $200 a year, but if one organization retains 90% of their donors year over year, they can expect to keep those donors for 5 years (with a sky-high donor LTV of $1,000), while if the second organization retains their donors at a more modest 60% retention rate, they will only keep their donors for half as long, and only realize a $500 donor LTV.

Benchmarks are not useless, but they aren’t meant to be targets, either. They are contextual ranges.

Donor Acquisition

• 0.3%–1.0% is common
• Below 0.5% can still work if LTV is strong
• Above 1% doesn’t automatically mean success

Many high-performing nonprofit acquisition programs operate comfortably below 1% because they’re buying future donors, not immediate profit.

House File Appeals (going to existing donors)

• 3%–10%+, depending on file quality and recency
• Year-end and emergency appeals often run higher
• Lapsed segments will be lower, and that’s okay!

A 4% response rate to a deeply lapsed file might be far more impressive than an 8% response rate to active monthly donors.

Here are scenarios where a low response rate can be a win:

• Prospecting campaigns with strong downstream value
• Mailings that drive larger average gifts
• Programs optimized for long-term retention, not immediate payback
• Testing new lists, formats, or offers that unlock scale (here at Postalgia, we love doing A/B tests – reach out now for a free consultation!)

If your CPDR is improving, your donor file is growing, and your retention rates are healthy, a low response rate is not a problem, it’s just a number.

This happens more often than nonprofits like to admit.

A high response rate can be a red flag if:

• It’s driven by expensive premiums
• Average gifts are low
• Fulfillment costs eat up revenue
• Donors don’t give again – stewardship is arguably more important than the ask itself!

A 6% response rate with a $12 average gift and terrible retention can quietly drain resources, while everyone celebrates the headline number.

Response rate tells you how many people replied. It does not tell you whether the program is sustainable.

Benchmarks feel safe because they offer easy answers. You can point to a number and say, “We’re in line with the industry.”

But your goal is not to be average.

A direct mail campaign should be evaluated like any serious mission investment:

• Did it grow the donor file?
• Did it produce sustainable net revenue?
• Did it strengthen long term donor relationships?

Sometimes that looks like a 1% response rate. Sometimes it looks like 0.4%.

Often, the best campaign is the one that doesn’t look impressive at first glance, but over time, that small response rate can grow into something much bigger.

The next time someone asks, “Is a 1% response rate good?” the most honest answer is: “It depends what it’s doing for the organization.”

And that’s the difference between obsessing over numbers—and actually knowing what they mean.

A “good” direct mail response rate is not a number you hit—it’s a result you achieve.

It’s the outcome of smart audience strategy, disciplined cost management, and a clear understanding of how donors behave over time. When you focus too much on benchmarks, you risk optimizing for optics instead of outcomes.

Nonprofit direct mail works best when it’s treated like a long-term investment, not an attempt at an immediate short-term spike. The latter can be gratifying, but the former is actually what you want in order to build your organization. That means accepting that some of your best-performing campaigns may look unimpressive on the surface—and some of your flashiest wins may quietly undermine sustainability.

So instead of asking:

• “Is this response rate good?”

Ask:

• “Did this campaign grow net revenue?”
• “Did it improve our cost to raise a dollar?”
• “Did it bring in donors who will still be giving two years from now?”

If the answers to those questions are yes, then your response rate—whatever it is—is doing exactly what it’s supposed to do.

That’s not just good direct mail.

That’s good fundraising.