Direct mail marketing is one of the most effective traditional product promotion methods. According to statistics, direct mail can generate over 600% more revenue than digital leads.
Direct mail marketing allows you to raise brand awareness by tailoring promotional messages to target audiences. You can leverage this product promotion method to stimulate the demand for new products or regenerate an interest in older stock. Some businesses also rely on direct mail marketing to convey significant announcements, such as new product launches and ongoing promotions.
But like other product promotion forms, tracking your direct mail marketing campaigns to determine if they’re generating quality leads is imperative. That’s the only way to ensure you’re getting value for your business’ marketing allocation.
Fortunately, there are several benchmarks to use in gauging the success of direct mail marketing. This article looks at six such parameters.
Starting With the Right Service Provider
Direct mail marketing is a strenuous endeavor that often calls for professional assistance.
You could be a day-old startup still struggling to find your footing in a volatile business landscape or an established multinational with a massive cross-border clientele. Either way, it’s more prudent to hire professional marketers to steer your direct mail marketing campaigns.
You can also optimize your direct mail marketing efforts by working with a reputable printing company like brilliantmpi.com.
Brilliant provides innovative printing services customized to your business needs. The company has solutions for every direct marketing situation. Whether you’re seeking to renew interest in your business or broaden your clientele, Brilliant will help you craft a captivating piece that will propel your brand into the spotlight.
Brilliant caters to both for-profit and nonprofit organizations. It offers a variety of direct mail marketing templates, including promotional letters and postcards, for experimentation.
Metrics for Gauging the Success of Direct Mail Marketing
1. Response Rate
Response rate is one of the most common metrics for measuring the performance of direct mail marketing. It denotes the percentage of customers that respond to your newsletters.
To compute the response rate, you’ll need to divide the total number of responses received from your direct mail recipients by the number of mailings sent.
For instance, if you sent out mail newsletters over three months and received 100 responses, the response rate would be calculated as follows;
1,000/100 = 0.1 or 10%.
Experts say 5 – 2% is a great direct mail response rate. 10% would be significantly higher, as it means one in ten mail recipients takes a keen interest in your offerings.
2. Conversion Rate
Conversion rate refers to the percentage of direct mail recipients who took the desired action indicated in your marketing copies. It’s often also known as order rate or net response rate.
The conversion rate is a better standard for gauging the success of direct mail marketing than the response rate. Even if a recipient doesn’t reply to your mails, you’re assured that your marketing copies delivered the intended results if the target heeds the specified calls to action (CTAs).
Common CTAs include subscribing to your website, liking your social media pages, and purchasing a product.
You can compute the conversion rate by dividing the total number of orders by the number of responses.
3. CPA
CPA stands for cost per acquisition. Also known as cost per lead, it denotes the portion of your direct marketing funds utilized in acquiring a single customer.
To calculate the cost per acquisition, you must divide the total campaign cost by the number of orders.
The CPA for direct mail marketing should be reasonable enough. Otherwise, you may want to explore alternative product promotion techniques to recoup returns on your marketing investment.
4. Average Order Value/Average Order Revenue
Although commonly confused with cost per lead, average order value is a distinct parameter used to gauge the efficacy of direct mail marketing. It’s mostly useful in figuring out your target clients’ purchasing power.
Determine how much revenue you generated out of every order received. This way, you can work out the cumulative profits realized from your marketing efforts rather than dwell on a single purchase.
The formula for average order value is Revenue/Number of Orders.
5. Return on Investment
The return on investment (ROI) is arguably the most reliable key performance indicator (KPI) used by most direct mail marketers.
RoI lets you know whether you generated a profit or loss from your current marketing formula.
To calculate the RoI rate, subtract the total campaign cost from the revenues generated and divide the difference by the campaign cost.
6. Lifetime Value
A direct mail marketing campaign’s lifetime value (LTV) relies on all other metrics to measure the overall success.
For instance, you could send out direct mail newsletters announcing ongoing discounts and generate ten clients who only patronize your store for the duration of your offers. Meanwhile, a similar campaign intended to stimulate an interest in a new product might generate two loyal customers.
In the final analysis, it makes more economic sense to earn two regular customers who pay undiscounted rates than ten discount-oriented ones.
Final Word
Understanding the above-listed metrics is key to unlocking the efficiency of direct mail marketing.
Experts recommend tracking your direct mail promotion campaigns over a reasonable period, say six weeks to three months, to determine the viability of the currently deployed marketing formula. Don’t be afraid to change tact if the present campaign doesn’t appear to generate meaningful leads.
