4 Campaign Metrics to Track to Prove Direct Mail Return on Investment
By Ashley Jorgensen | April 1, 2017
You are probably already aware that direct mail is one of the most traditional and effective ways to amplify any marketing campaign. Today, it is one of the best ways to really reach your customers because it cuts through all of the digital advertising noise and actually connects with them.
However, other people within your company or organization may not be quite as convinced that direct mail is the best way to go when it comes to marketing. Some fail to see the value in direct mail campaigns. The best way to convince them of that value is to measure and report on four key metrics to use when measuring your next direct mail return on investment
Here are four campaign metrics to track so that you can prove your direct mail return on investment:
1. The response rate
The first and most basic direct mail ROI metric to measure is the response rate. How many people felt compelled and actually acted based on your mailing? The key to success here is to have a clear and direct call to action contained within your mailer to push people to do something. A great way to measure your direct mail return on investment is to use that call to action to send them to a specific website landing page or track a phone number established specifically to measure your returns.
Measure it: After the call-to-action on your direct mail campaign has expired take the number of people who responded by the total amount you sent the piece to. For example, if you sent your campaign to 10,000 people and 350 responded to your offer that’s a 0.035% response rate, bravo!
2. The conversion rate
Of course, response rates are important. However, what is far more important is actual conversions and sales. Traffic is great and all, but the ultimate goal of a direct mail campaign is to generate real sales and revenue. You can use that same website to measure your sales as a result of your campaign. If you want to be able to measure results through in-store purchases, simply include a coupon that is exclusive to the mailer.
Measure it: This is the percentage of users who took action on the offer you put on your direct mail piece. For example, if you had 100 people act on your offer from the 350 who initially responded that’s a .28% conversion rate. Go you!
3. Your cost per response
It’s important to measure exactly what your costs are so you know how much it took to acquire each customer. The key to successfully measuring this metric is to make sure you are breaking down your costs for each individual direct mail campaign you send out.
Measure it: Take your overall individual direct mail campaign costs (this includes the price of the list, design, print, and mail costs) and divide by your response rate. Let’s say your campaign costs $20,000 if you divide that by a 350 response rate your cost per response is roughly $57. Not bad!
4. Your cost per sale
If you want to be able to compare the success of different campaigns (and you should), you will need to track your cost per sale for each individual mailing. This will help you to know which campaigns are actually resulting in sales for your company. This is different than measuring your conversion rate because you are factoring in the cost of your campaign with this metric.
Measure it: In order to find your cost per sale, you must take the total cost of the campaign and divide it by how many sales were actually made. If your campaign cost $20,000 and there were 50 closed sales that are $400 per sale.
Bonus: If you need a refresh on your direct mail planning, head over to simple but powerful direct mail planning starters.
Deciding which direct mail return on investment metrics to focus on can be a tough decision, but even narrowing in on 2 of these metrics will help you understand the performance of your individual direct mail campaigns. It’s super important to start tracking your campaign response metrics so you can learn from mistakes and wins to construct more engaging campaigns in the future.