Marketers today deal with many challenges, but maybe one of the biggest is proving that direct mail ROI makes an investment in this “old school” channel worthwhile.
Just think of all the ways our lives have been transformed by digital technologies in the last 25 years or so, for better or worse.
So when you propose using direct mail as part of a marketing strategy, it prompts questions like:
- Isn’t direct mail dead?
- Isn’t it really expensive?
- Isn’t it low-tech?
- Isn’t it irrelevant to today’s audiences?
Fortunately, the answers to these questions can help make the case for direct mail’s ROI.
The Myths About Direct Mail
Have you heard these statements about direct mail marketing?
- Direct mail is dead
- Direct mail is too expensive
- Direct mail isn’t digital
- Direct mail doesn’t work for my industry
- Direct mail doesn’t appeal to millennials or Gen Z
With myths like these to confront, it’s understandable that getting buy in from stakeholders isn’t easy. A strong preference for digital marketing, and a lesser amount of experience with mail’s techniques and rules mean that it is a difficult channel to master. Misconceptions about direct mail’s standing in the marketing mix are impediments to building support for mail as part of a strategy.
6 Stats To Know About Direct Marketing ROI: Pitching Your Next Campaign
Dispelling sketchy myths is one thing. To win stakeholder buy in and start running with a direct mail campaign, you need to prove that it can work.
Here are some statistics and findings from studies that make the case for direct mail’s effectiveness and good-to-great ROI.
- Direct mail enjoys high response rates compared to other channels. According to the annual ANA/DMA Response Report, house lists produced a 9% response with direct mail, while prospect lists achieved a 5% return.
- Direct mail requires 21% less cognitive effort to process than digital media. That comes from a study by market research firm True Impact, and it means that it’s easier to understand and more memorable.
- Most Non-Profit Fundraising Comes from Direct Mail. In 2020, 12.9% of fundraising came from online donations in 2020, according to data in the most recent Blackbaud Institute Charitable Giving Report. Yes, that’s a big jump over previous years, likely as a result of the COVID-19 pandemic. But this also means that 87% of giving comes from offline sources – like mail.
- Millennials love getting mail. According to a USPS survey of millennials, 87% of this generation – the 80 million Americans born between 1982 and 2002 – love receiving mail. This fits with their affection for physical media, like vinyl records. The study also revealed that 57% of millennial respondents acted on direct mail offers.
- Mail sticks around for far longer than digital messages. According to one study, customers keep mail they receive for 17 days on average. Compare that to the average experience with email, text, or other digital message that vanishes with a single tap.
- Direct Mail is relevant to modern audiences. Millions of people have grown up as digital-first consumers. But they still engage and interact with mail, especially because it can provide an omnichannel experience with QR codes, PURLs, Augmented Reality, Informed Delivery, and innovations like voice assistant, NFC, and video-in-mail technologies.
How Can You Measure Your Direct Marketing ROI?
But you need to understand if and how your mailing campaign accomplished its goal. Here are a few ways to dig deeper into the numbers.
- Campaign Costs – Add up the expenses for your campaign, such as creative (writing and design), printing, postage, marketing, programming, and list rentals. This gives you a good starting point.
- Cost Per Piece – Divide your campaign costs by the total amount of pieces mailed. Depending on the complexity of the piece, the audience, the USPS mail class, and many other factors, your results can vary widely.
- Response Rate – Divide the total count of responses by the number of pieces mailed, then multiply by 100. This figure, though, can be misleading, as it doesn’t always indicate if a mailing succeeds or fails.
- Conversion Rate – Divide the number of sales by the total number of responses, then multiply by 100. Again, the quality of the sales achieved may be more important to the overall success of the campaign than the amount of sales.
- Return on Investment (ROI) – Subtract revenue generated by the mail piece from the campaign costs, then divide by the campaign costs. Next, multiply that result by 100 for the ROI figure.
Keep in mind that key metrics, like your offer, your costs, etc. are more important in determining a good ROI for your campaign – and the lifetime value of your customer – than a high response rate.
Wrapping it up
Direct mail is a very effective way to reach customers. It can deliver personalized messages, and build engagement like digital but also offer a singular tactile presence that the digital experience can’t match. And it enjoys a high response rate compared to those channels. But to achieve a good ROI, you’ll have to keep an eye on all your numbers: production costs, postage, and so many more. You’ll also have to know what factors and interests you’ll have to balance to get stakeholder buy in.
At mailing.com, our data management and mailing services teams have decades of expertise in creating successful direct mail. Call or contact us – we’d love to help you put together a complete and cost-effective direct mail campaign to accomplish your goals quickly.