This is really interesting and a piece of work we always have to consider. One question I have about the data relates to deliverability. how many of each type do I need to send to get the yield? Seems that the response rates are very close by type but it would seem to me that email is tougher to get through to the customer? Of course the risk of bad spend is obviously much less with the email.

Were the email campaigns to company subscribers or were they from bought emailing list? 
 
 

My agency, Innovative Marketing Resources, imrcorp.com, has been a direct mail agency for 22 years, an email marketer for 10 years and a Hubspot certified inbound marketing agency for 2 years. We’ve seen about every combination of mail, email, PPC etc. there is. The real question one needs to ask about any of these tactics is which is the most effective and cost effective at getting visitors to your website. Once a visitor is on your site, you can pretty much market to them similarly whether they got there by direct mail, email, social media, PPC or organic search. Our experience pretty clearly indicates that content marketing – attracting visitors by organic search – is the most effective and cost effective approach and can produce the highest quality visitors. Disruptive advertising – whether by direct mail, PPC, outbound email marketing etc. can amplify the value of good content marketing but using any of these tactics without a proven content marketing strategy is going to produce short lived, disappointing results.

@Lee You bring up a good point. Different companies will certainly see different yields based on their list, typical response rates, and message content. I would encourage companies to run a similar analysis on different types of marketing to see which has the highest ROI for them.  
 
@Digby Based on the article, the list that they used was "a group of 105,000 customers in its loyalty club database." 
 
@Kevin I absolutely agree that you need to analyze what's most effective and cost effective. And certainly getting leads for your business often times starts with getting them to your website first! 
 
Thanks so much for the comments!

OK,Ok, but answer the big question. How did you get the email addresses to begin with? We never get a clear answer to that.

@frank - we, almost without exception, see poor response and high levels of frustration with purchased lists. The only way to get an email address, IMO, is by the permission of the person whose address it is. That goes back to my position that content marketing and permission forms have to be the foundation of any of these other tactics.

This article caught my eye because we had this discussion yesterday in our marketing meeting - email vs direct mail. The last question in the article, "Would a B2B services company receive similar results?", is particularly relevant to our company. The previous comment about "deliverability" is also pertinent. Since we work a lot with Government organizations, we are confronted with more and more sophisticated firewalls blocking emails. We are also conscious of the blocking role of Executive Assistants who handle mail. This led us to consider personal delivery and/or the use of the highly visible, more expensive, Express Post option. In our situation, another consideration in the mix is potential ROI from one single conversion - a "sale" can range from a few thousand dollars up to $100,000 (plus repeat business potential). Then again, different executives have preferred modes of contact (including the social media option you mention). Taking your cue, Juliette, we will have to do some measurement of results to find out the best option and to understand the variables involved.

UMMM, These cost figures are WAY OFF. I may be missing something... But, where do you get 35,000 valid email address for $6/M or $6 / thousand that "respond" 23% (Is that Open, CTR, or actual Purchases??), AND spend $67 on average .... For $210 total cost? Does that include the cost to send the email? How about the A/B split testing? Copy? Graphics? 
Most open rates are close to that 23% on a great list. Then there is the CTR. Then there is the actual conversion. 
No doubt, email has a higher ROI. But these numbers don't seem realistic from our experience.

There are more questions here than answers, and numbers can mislead if you let them. Assuming the soundness of your ROI calculations, the unmentioned fact is that both scenarios that included the higher cost mail component delivered more actual dollars of revenue. The mixed media campaign delivered a return that beat email-only by slightly more than 11%, or $60,512! So the additional investment in direct mail had a positive return of almost 3:1. Moreover, the higher average order suggests the probability of a higher margin per transaction. The latter also suggests further analysis of the direct mail offering to determine what caused it to elicit these better results. Bottom line: we need to be wary of numbers viewed in a vaccuum.

This conclusion seems logical in an instance where you have email addresses and mailing addresses for 100% of your target audience. How often does that happen. My company executes micro marketing campaigns for the healthcare industry to help them hire clinical professionals. We typically have mailing addresses for 100% of the target audience, with phone numbers for 60% of them, and email addresses for 30-35% of them. Our statistics show that response rates and ROI are nearly 5x higher when using a combination of direct mail, email, voice and web than any one strategy alone. Particularly email alone.

This topic really got my interest, I started in the marketing field in the good old days when direct mail was "hot" and an average response was 2%, which has dropped to 0.5% today. So I am very curious as to this case study that shows 25%. What kind of mail piece was sent out? What was the offer? What the response mechanism?

The most essential piece of relevant data from the Harvard article is missing here: that these name came from a loyalty club database, not simply a "database full of leads". The results exemplified here hardly applicable across the universe of email vs. direct mail prospecting campaigns, where average response rates are typically ten times lower or more with cold lists, and name acquisition costs vary quite significantly based on source, offer made, and number of times contacted.

I'm unclear as to the open rate. What was the open rate? I'm developing an email campaign for a client and our numbers we quoted were: 19.9% open rate, 5.6%CTR and 5% purchase rate. These are conservative figures we are well aware, however, were your open rates better?

Some really interesting points raised. ROI by channel or across multiple tactics is definitely the holy grail of modern marketing activity. A point I would like to add is placing emphasis on the value or opportunity of a sale (or lead) - especially across different audiences and segments.  
 
In many complex B2B environments multiple decision makers are involved, smaller audiences, variable value of opportunities and off-line sales. These all change the value or weight on the conversion of different audiences and segments. There are still many instances generating impressive ROI with the use of highly impactful direct mail (where email failed to generate response). 

@greg 
"In many complex B2B environments multiple decision makers are involved, smaller audiences, variable value of opportunities and off-line sales." 
 
I agree with this experience completely! That's why content marketing with a managed SEO program is the best way to go. Although I agree that if you're limiting your choices to mail and email, there are demographics and circumstances when mail still finds people better than email.  
 
But with either email or mail you're trying to disrupt increasingly more difficult to reach needles in the haystack by when you need to contact people in government or behind executive assistants, with any direct marketing tactic - so the costs go up and the success rate goes down. Even multiple decision makers and smaller audiences look for answers online when they are ready to engage. Using a magnet instead of a metal detector has provided our best results in complex B2B, government and other marketing campaigns where reaching out to disrupt a prospect with an offer is actively discouraged.  

I'd be curious to see how this affects different age groups. For instance, would the return be as effective for the 14-18 year old who hates e-mail?

Where on earth did you get such response rates??? That should be the story here. Virtually unheard of numbers. From what I see in this article I would have to say that the elephant in the room here is that, if true, this response has more to do with the quality of the list.

I'm curious how this applies to non-profits. I can see in my own behavior that an email coupon for a store is preferable than a direct mail because I always have my phone with me. The same use case doesn't hold with non-profits seeking donations or engagement. Also, you have to account for reach. If you simply switched to an only email marketing strategy, what % of your contact base would you simply cese communication with?

23% Response Rate huh? Riiiiiight. I think someone did the % conversion incorrectly because that's off by 1-2 orders of magnitude.

@Ron I'm glad to hear that you found the article relevant to what your company is discussing. I'd love to hear your plans for testing your results! 
 
@Julian You bring up a great point on the cost figures. I had the same question as well about what specifically they include. It doesn't list it in the HBR article, but if I had to take a guess based on the figures, it's probably the cost/send (many ESPs charge on a per email basis) and the printing costs for the direct mail pieces.  
 
@Michael I would agree that you need to take a critical eye to the data. Marketers will need to determine what metrics are most important to them, whether it's ROI or revenue or profit. Looking at these in combination can help you determine the best channel for you.

Let's consider the source of this article. It's an inbound Internet marketing blog. I wouldn't call it an "investigation". At our company, AdServices (www.adservices.net), we can offer direct mail for $0.50, which includes printing, mailing services, postage and drop shipping. Although it's pennies to send an e-mail, it's very expensive to obtain an e-mail list, and then for them to be qualified leads is close to impossible.

If I was to write a 13,000 word document on this (which I did) and actually provide 'real' stats from 'real' research then the figures would be very different. If I had an hour to write 800 words and I had a vested commercial interest in both of these mediums from a list brokers/software angle, I'd write what I just read above. This is no more than a junk mail article in itself. *unsubscribed*

According to the Direct Marketing Association's “2012 Response Rate Report,” the rates for letter-sized direct mail (3.4 percent) were 30 times higher than those for email (0.12 percent).  
 
It would appear that someone cooked the books to make email appear stronger than it is. My company has been producing direct mail programs for 20 years, and email campaigns for 10. I've never seen anything even close to these numbers for an email campaign.  
 
Recent articles in Target Marketing magazine and Direct Marketing News, which both covers all types of direct marketing, and have no vested interest in direct mail or email, have stated quite the opposite. The ROI for direct mail is significantly higher than email. 
 
We all want more business, but let's not mislead people. 
 

With all the fast lane changes in social life, Marketing Strategies must change to keep up with the up coming generation.There is no guarantee that what is working well today will work as well tomorrow. 
The power of direct mail or email is very relevant.As a matter of fact I believe paper holds the most power.  
Fake email addresses are a lot more common than direct mail addresses. But the direct mail comes nowhere close to the speed of an email. So I guess it's a matter of choice or use both... 

I believe this analysis but, frankly, direct mail and email marketing are too similar to make the comparison meaningful -- they have similar results and one costs less. Duh. I knew that. The comparison I want to see is email vs trade show marketing vs advertising.

I find this to be somewhat interesting, but of little realistic useful value, as it is far too generic. As you should know, key factors in any direct marketing campaign include the type of product or service you are selling (or for that matter, is it a product or service?), industry, price point, target audience, etc. You're study may make sense for businesses that are primarily on-line, i.e., "groupon". But just like with all of the tools in the marketing tool kit, there is an appropriate and valuable use for each. I think you would find that those in many of the services industries-- financial, insurance, real estate, etc., would beg to differ with your ROI results.

I’ve sold in direct mail marketing for over 20 years. There is overwhelming research to demonstrate the effectiveness of combining direct mail and e-mail. In the Harvard study, combining the two lifted total spend 15%. While the ROI for e-mail is significantly higher several significant contributors are left unanswered, namely: 
• Was the product/company being featured well known to recipients? This factor is important because open rates for known and trusted companies outperform those of unknown products/companies and would thus affect ROI. 
• $21,210 for a direct mail campaign to 35,000 recipients seems inordinately high. It would be interesting to know what exactly was sent? You could spend a fraction of $21,000 on a much smaller catalog highlighting featured products, peaking interest then driving people to your web site. 
Bottom line, I recommend combining the power of direct mail to lend credibility followed by an e-mail blast to improve open rates. If your company could benefit from a 15% lift in total spend you should combine approaches.  

Shared Direct Mail is typically in the range of $30 per thousand(or under)which does drastically change the entire ROI numbers.......but what is fundamentally more important is the reason to spend these types of $$'s on Direct Mail- because you can't just obtain 35,000 e-mail addresses of your specific target customer...let's compare apples to apples when we analyze ROI!

Thanks for the numbers to back up the argument. Those are really helpful.

Good day.  
 
Like some of the others, I found these response rates to be totally unrealistic. And I wondered what the response meant. Did the people buy anything? 
 
I also have yet to see email do well in acquisition. Were these current customers or prospects?  
 
I will try to keep an open mind, but I don't find much of this article to be all that fascinating or usable. Just one man's opinion.

Another important point is the difference in marketing to customers and prospecting for new customers. Email is a very solid when you have an opt-in customer database. It is terrible if you do not already have a relationship with the lead. We have found in prospecting for new customers that a combination of Direct Mail and Email delivers better performance than either tactic stand alone. Of course that is where the difficulty of getting a good list that contains quality postal and email address come into play.

Another important point is the difference in marketing to customers and prospecting for new customers. Email is a very solid when you have an opt-in customer database. It is terrible if you do not already have a relationship with the lead. We have found in prospecting for new customers that a combination of Direct Mail and Email delivers better performance than either tactic stand alone. Of course that is where the difficulty of getting a good list that contains quality postal and email address come into play.

Am I going crazy? Response rates of 25% to direct mail and 23% to email? All being treated like this is the norm. Not only are these response rates, there is a 100% conversion rate. Who ever heard of such a thing? Can anyone help me? I feel like I'm in a fantasy world.

This is what happens when a breathless blogger ("Fantastic article!) quotes a big name academic institute (HBR) using a single case study to make a bombastic conclusion - E-Mail Marketing Is King!!. 
The comments from actual marketing people, and my similar experience, show that virtually everything about this "test" is highly questionable. You and HBR should know better.

Yes @JimOlsen, you are taking crazy pills... 
 
I have worked in direct mail and digital for many years. 24% response on direct mail is a fabricated fantasy. I would also consider 25% response in email to be somewhat unrealistic. However the responses were great and it solidifies some basic truths:  
 
Email is pound per pound more effective than direct mail.  
 
Direct mail is still a relevant channel and can compliment digital efforts 
 
Cross channel approaches like telephone direct and email will boost overall responses. 
 
The posts from everyone were awesome, and made me remember why I like doing this. Great to see such passion and creativity in the way we market. Sometimes its not always about the metrics, there are variables that are unique to any specific initiative that cannot be boilerplated as this data most certainly was.