One of the most rewarding — and possibly frustrating — parts of a marketing campaign is figuring out the effectiveness of your efforts.
It’s obvious when you see an immediate increase in sales that something you’re doing is working, but marketing doesn’t exist in a vacuum. To be able to attribute your success to a particular campaign, you need to track your analytics and measure your results.
Smart tracking of your metrics requires planning and thoughtful campaign design. This is especially true when it comes to direct mail campaigns, which were notoriously difficult to measure in the past but are now much easier to analyze thanks to integration with digital channels.
What we know now is that the response rate for direct mail is up to nine times higher than any other advertising channel, and up to 90 percent of direct mail gets opened, compared to only 20-30 percent of emails. In other words, direct mail works, but you have to know how and why.
The steps below will get you started before you implement your campaign.
Choose Your Tracking Method
When implementing a direct mail campaign, it’s crucial to include a call to action that is trackable on each direct mail piece. If you don’t, you’ll have no way of attributing sales or leads to the campaign. Popular options include:
There are a few ways to track calls. One option is to set up a separate toll-free number that you only list on your direct mail pieces, making it easy to measure the response rate. You can even use variable data to add a unique phone number on every piece of direct mail if you want to know not just how many people responded but who they are.
If you don’t go that route and use your regular business line, just make sure your whole team knows to attribute these calls to the campaign. You can log the calls in your CRM using a special call type, or use a free method like a Google form to capture the data.
By including a campaign-specific URL on your direct mail piece that leads to a landing page on your website, you can then use the analytics from your site to see how many people visited the page. This can be easily done in your Google Analytics account using Google’s Campaign URL Builder.
To make your campaign even more tailored, you can also use a personalized URL (PURL) for each person on your mailing list, with the URLS taking them to a landing page customized with content based on their demographics and other data. Either way, campaign-specific URLs make direct mail response rates easy to track.
Coupons and QR Codes
If you include a coupon in your direct mail, you can gauge the effectiveness by how many coupons are redeemed in the store or on your website. Similarly, include QR codes that take scanners to a custom landing page on your website, and from there you can track how many landed on that unique page.
Many marketers are still unaware that USPS® can support their efforts to track engagement through a program called Informed Delivery®. Informed Delivery is a consumer-facing feature that provides users with digital previews of their household mail arriving soon. Mailers can make their campaigns interactive by integrating digital campaign elements like custom images and URLs, which will show up in the mail notifications for any recipients who use Informed Delivery. This custom content helps to drive action from your piece. And the best part is, as a sender, Informed Delivery gives you even more insight into the effectiveness of your campaign.
While there are many metrics you can use to gauge the success of your direct mail campaign, here are five of the most common.
The response rate is just what it sounds like — the percentage of people on your mailing list who responded to your piece of direct mail through any of the methods above. What’s a good response rate? According to the Data & Marketing Association, in 2018, the direct mail response rate was 9 percent for house lists and 4.9 percent for prospect lists.
Also known as order rate, this metric is the percentage of recipients who converted their interest into a purchase of your product or service due to your direct mailer. While response and conversion sometimes happen at the same time (for example, someone uses a coupon in the store to buy a shirt), this is an especially important data point for businesses with longer sales cycles, where the call-to-action on the direct mail piece is the start of a longer conversation with the prospect.
Average Value of Sale
Divide your annual revenue by the number of orders you get in a year and you’ll come up with your average value of sale, or average order size. This number can give you insight into whether you should focus on up-selling or create new pricing packages that could lead to larger purchases. It can also help you determine whether the ROI you’re seeing on your marketing efforts is high enough.
Cost Per Acquisition (CPA)
This metric tells you how much it costs to get a new lead or customer, and can be found by dividing the campaign costs by the number of leads or customers it helped you acquire. By comparing your CPA for your direct mail campaigns with the CPA for your other marketing channels, you’ll get a clear picture of which methods are most cost-effective.
Average Close Rate
How effective are your sales? That’s a pretty important question to answer, and it can be found by dividing your number of closed deals by your total opportunities, or leads who entered into the sales process. Average close rate can be measured on a company, team, or individual level, and if you have a longer sales cycle, it can help you determine how many leads you need to bring in from a marketing campaign in order to achieve the conversions you’re after.
How to Improve Your Direct Mail Response Rate
The goal is to always be improving, and direct mail is a great way to improve your marketing performance and increase your profits. In fact, for every $167 spent on direct mail in the U.S., marketers sell $2,095 in items. Not a bad return on investment. Follow the steps below to get started.
Implement an Omni-Channel Marketing Plan
Direct mail and digital methods are actually complimentary channels. One study found that consumers spend 25 percent more when brands use direct mail with email, and pairing direct mail with digital ads has shown a 28 percent higher conversion rate. By reaching out to prospects and customers through a variety of channels, you only increase your chance of success.
Create Highly Segmented and Targeted Direct Mail Lists
In order for your mailers to be effective, you have to be sending them to the right people. This means not buying generic lists and hoping for the best. By using the data that you already have in your database, you can effectively segment your audience into more targeted groups, sending them more relevant promotions and information.
Use a Clear Call to Action
Whatever you want the recipient to do — buy a product, book a service, visit a landing page, etc. — make sure that your CTA is clear, compelling, and action-oriented. Limited-time offers and promo codes can also help to drive action.
Direct mail is a fantastic marketing tool, and it’s only become more efficient and effective with the addition of digital marketing channels. The key is to think about tracking from the start so that every component of your campaign can be accurately measured and optimized for high ROI.