First Move Direct Marketing

35 Years of Delivering Direct Marketing Success

35 Years of Delivering Direct Marketing Success

How to Measure your ROI to Increase your Direct Mail Profitability

How to measure your ROI in Direct Mail

Whether you run campaigns where you measure your ROI in direct mail on its own, or complemented by an email campaign, you’re bound to be drawn by its benefits.

Direct mail ROI is one of its major draw cards, from the ability to dissect direct mail response rates to having information with which you can predict future results. The beauty of direct mail is the extensive amount of analysis you can perform to understand its impact.

There are plenty of mailing tips to improve ROI, such as employing postal discounts for bulk mailing and maximizing your weight for the postage paid, but what about the measurement?

First perform an audit of everything that comprises the costs of servicing the mailer; allow for production and distribution costs, suppliers and staffing, research and development and anything that has gone into your mailer’s creation. It’s good business sense to keep a handle on these kinds of expenses and gives your ROI gravitas when presenting your sales figures.

Your key metrics are as follows:

  1. Count – number of direct mail pieces sent
  2. Response rate – the number of leads you received (as a percentage) from the total count
  3. Average order value – how each recipient converted
  4. Cost per acquisition – how much it cost you terms of production and distribution costs to get the lead
  5. Return on investment – how much you’re ahead of the game after your efforts

While these are some of the most important factors, it’s important to understand the source(s) of your sales—segment your results. Is your campaign standalone direct mail or did you combine with other forms of media? Understand what kind of upswing your campaign received from this approach by looking at each source individually and combined. For example, a direct-mail campaign complemented by an email follow-up could have an upswing of 25%, and you need to understand why.

It’s important to view direct mail’s ROI in terms of both quantitative and qualitative data. While quantitative analysis offers the best business case, don’t ignore the finer points of customer retention. Every campaign you run is an exercise in brand loyalty and awareness. Even if your customer didn’t convert they might in the future. It’s unavoidable, but if you and anticipate this and give them the option to opt into further communication your mailing effort isn’t futile.

Give your prospect an option to be contacted in 3, 6 or 12 months when they might need your product or service. For instance, if they’re locked into a contract with the provider or just shy of buying their first home.

As we know, direct mail has a higher response rate than most other forms of marketing, and the return on investment often follows suit. Talk to a Direct Mail company to find out how you can create effective mail campaigns with skyrocketing ROI.

 

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