Using “opt out” reply cards in direct mail

Improving direct mail response rates generally may be accomplished by two alternative approaches: 1) target selection and 2) optimization of direct mail characteristics. We propose a conjoint analysis-experimental approach to simultaneously implement target selection and design optimization. Target selection is, in our approach, induced by the “opt out” function of the reply card. In an empirical study for a charity institution, we show how the optimal design of a reply card can be derived and how the reply card can be used for target selection purposes. The results from both approaches are used to derive profit implications.