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Measuring The Success Of Your Direct Mail Campaign

Mail ForwardingDirect Mail, and indeed all marketing initiatives are best when they are monitored and measured to gauge success and track improvements. It’s generally believed that to measure the success of your Direct Mail Campaign you need to calculate four key figures:

Cost Per Recipient

To begin with, you’ll have to understand how much money is required to deliver your message to each recipient. Due to the nature of direct mail this gets smaller as your contacts list increases. Add together all costs of design, printing and sending then divide by the amount of addresses your materials are being sent to. This will leave you with your cost per mail piece.

Cost Per Acquisition

This figure is a good reminder of cost versus revenue! You need your cost per acquisition to be as low as possible; and certainly lower than the average revenue from a new acquisition. This figure is only really needed to measure success of a sales-centric direct mail campaign; your campaign could however favour spreading awareness, collecting information, etc.

The formula to calculate cost per acquisition is similar to that of cost per recipient; but instead of dividing total costs by number of recipients, you simply divide it by the number of new customers you gained.

Response Rate

To measure the response rate for your direct marketing campaign, divide the number of people who actually responded to the campaign with the number of people you sent the direct mail piece to. With Direct Mail, you can easily cross channels and ask people to respond by phone or online. Your numbers may be down to the type of mailer you sent out. Was it full colour? A brochure? A card? Did you invest in strong design and layout? Try to balance your response rate against your overall investment.

Return

To calculate return you total the value added by this campaign (that is the total value of sales generated from your direct mail efforts) then divide this figure by your total costs and multiply by 100. For example if you spent £1000 on your campaign which generated £40,000 in sales your return would be (40,000/1000)*100 = 4000% meaning for every pound you spent, you were generating forty pounds in return. A study indicated that in the USA the typical return rate for an e-mail campaign was $36 for every $1 invested.

Additional options

These are just starting points. If you’re involved in planning and managing integrated campaigns, you’ll need to define your metrics and put monitoring tools in place. You can also commission before and after research to look at the impact of your campaign on overall brand awareness.

Measurement best practice

Testing is important. If you’re changing your creative approach, you may want to test those changes in isolation by keeping your target audience, timing, offers and incentives the same.

As with all aspects of marketing, reporting and measurement is a key part of the process to determine your return on investment and compare it against other sales and marketing strategy. Defining your goals and benchmarks will help identify where improvements can be made across your marketing mix.

ThomsonLocal are a B2B and B2c Direct Marketing and Email Marketing provider, get in touch for further guidance in your marketing efforts.