We know from research that targeted direct mail marketing works, but just how effective is it, really?
To answer this question you have to take a step back and first ensure you are tracking the campaign’s results. Once tracking is implemented, you can quickly and easily calculate a few key metrics from the data you’ve collected.
Key Marketing Metrics: Direct Mail
Measuring your campaign's success is an essential part of any direct mail marketing (or any marketing) effort, but it can be difficult to know where to start. An increase in leads (such as calls or emails) or foot traffic into your establishment may be an indicator that your campaign worked, but it’s important to dig deeper to understand how well it worked.
To do this, there are a few key metrics related to direct mail that you should be calculating for each of your campaigns. These metrics you choose to track may vary a bit based upon your goals and tracking capabilities, but the shortlist below should give you a good idea of where to start. Often referred to as KPIs (key performance indicators) these metrics include the following:
Response Rate: The number of people who responded to your direct mail campaign. This could mean they emailed you, they called you, they filled out a form, they visited your website (lift in website traffic), or they took some other requested action as a result of the campaign.
How To Calculate: Responses Received/Pieces of Mail Sent (displayed as percentage)
Conversion Rate: The number of people who took the desired action as a result of your direct mail campaign. This could mean people who set an appointment, or clicked on a link, or made a purchase. Generally, conversion rate refers to people who became customers as a result of the campaign.
How To Calculate: Number Of Desired Actions Taken (or purchases) / Responses Received (displayed as percentage)
Cost Per Acquisition: The amount it costs your company to obtain each new customer. This cost includes money you spent on sales or marketing efforts divided out on a per customer basis. This can also be applied to obtaining new leads, in which case it would be called “cost per lead.”
How To Calculate: Campaign Costs (total) / Number Of New Customers
ROI (Return on Investment): This is a big one! ROI refers to the amount you’ve made as a result of your campaign, less all the expenses that went into creating it. Keep in mind the campaign cost includes any and all costs associated with the campaign - anything from design, to paper, to postage.
So there you have it, a few key metrics to calculate to determine the success of your direct mail campaign.