Measure Direct Mail Success
Research has shown that direct mail ROI is strong throughout the marketing funnel: capturing the attention of buyers, creating meaningful connections with prospects, shortening sales cycles, and generating more revenue.
And while the benefits are clear, many people still believe direct mail is too expensive. However, when direct mail campaigns are executed and measured correctly, they generate a high return on your investment.
With the right strategy, tools, and processes you can put the common direct mail misconceptions to rest and measure the impact of your campaigns. Here’s how:
How to Measure Direct Mail Success
1. Set Direct Mail Campaign Goals
Setting campaign goals is critical to achieving success with direct mail. Goals will ensure every member of the team is centrally motivated, and will also enable you to accurately measure performance. Some qualitative direct mail campaign goals may be:
- Increase response rates to outreach
- Increase sales for a specific product
- Secure more meetings
- Increase pipeline or revenue
It’s important to take stock of how your current programs are running to understand how “success” will be defined. Afterall, accomplishments can be interpreted differently at every organization, and even between departments. Before starting any campaign, measure relevant program metrics to define your baseline. From there you’ll be better equipped to set quantitative goals. “Execute 20% more meetings in Q1” is an example of a quantitative goal.
Determining your direct mail marketing KPIs will help your organization understand what benchmarks you have to hit to be successful. At the end of the day, whether you’re hoping to achieve an increase in pipeline or improve contract values, knowing the business outcomes you’d like to achieve will guide your direct mail campaign strategy.
2. Establish Your Direct Mail Marketing Metrics
Unlike digital marketing, you can’t measure open or “click” rates with direct mail. Rather, you measure the influence direct mail campaigns have on other metrics. Here are metrics to track (depending on your goals) and measure the success of your direct mail campaigns:
Response rates are the percentage of people who respond to your direct mail sends. Response rates can be calculated by this simple formula:
- Response Rate = Responses / Sends
To determine a change in response rates from a direct mail marketing campaign or program, use the following formula:
- (Response Rate with Direct Mail – Avgerage Response Rate without Direct Mail) / Avg. Response Rate without Direct Mail
Conversion rates are the percentage of prospects that converted into paying customers during a campaign. Use this formula to calculate conversion rates:
- Conversion Rate = Number of Customers Generated / Responses
To determine a change in conversion rates from a direct mail marketing campaign or program, use the following formula:
- (Conversion Rate with Direct Mail – Avg. Conversion Rate without Direct Mail) / Avg. Conversion Rate without Direct Mail
Close rate is the number of prospects that become customers in comparison to the number of leads in the pipeline. Here is a simple formula to calculate your close rate:
- Close Rate = Customers Generated / Leads in Pipeline
To determine a change in close rates from a direct mail marketing campaign or program, use the following formula:
- (Close Rate with Direct Mail – Avg. Close Rate without Direct Mail) / Avg. Close Rate without Direct Mail
Customer Retention Rate
Retention rates are the percentage of customers your organization maintains throughout a specific time period. Use this formula to calculate your retention rate:
- Customer Retention Rate = ((EC-NC)/SC)*100, where:
EC: The number of customers at the end of a period
NC: The number of new customers during that period
SC: The number of customers at the start of that period
To determine a change in retention rates from a direct mail marketing campaign or program, use the following formula:
- (Retention Rate with Direct Mail – Avg. Retention Rate without Direct Mail) / Avg. Retention Rate without Direct Mail
3. Calculate Direct Mail Success
The cost per direct mail send is an important calculation that enables marketers to determine the success of their campaigns. Direct mail costs can include manufacturing, design, printing, fulfillment, and postage. In order to see the cost per send, simply divide total costs by the number of sends in a campaign.
Why does that matter? Calculating the total cost of a direct mail campaign and comparing that to the pipeline or revenue generated will help guide future campaigns. Return on investment (ROI) is a valuable metric that shows how your direct mail campaigns performed. To calculate the ROI of your direct mail campaigns, divide the net profit by your total campaign investment and multiply that by 100:
- ROI = Net Profit / Total Investment * 100
4. Make Measuring ROI Easy
For years, marketers have been tasked with monitoring and measuring the success of their direct mail campaigns. But without the right tools and a centralized view into relevant performance metrics, they’ve had little to no insight into how their efforts performed (especially if team members are sending without tracking anything). A sending platform integrates directly with your CRM, marketing automation, and sales engagement platforms to help you measure the ROI of your campaigns. Additionally, it enables you to set up triggers to automate campaigns within the tools you’re already using.
Need inspiration for your next great direct mail campaign? Grab a copy of our eBook below!