In today’s fast moving digital age, it seems there is less and less and room for Direct Mail to be noticed. The truth in fact is, Direct Mail is still an extremely powerful tool in your marketing tool box. And whilst getting your message to your customers is extremely important, perhaps just as important is measuring the effectiveness of your direct mail campaigns.
According to the centre for retail research, e-commerce & online sales in the UK accounted for 10.7% of total retail sales in 2017. Effectively, this means 90% of the retail market place could be served by Direct Mail. Put simply, businesses who rely on direct mail campaigns to engage with their audience and promote their products and services will have to understand and identify the ‘where’ and the ‘why’ to see a positive ROI.
When looking at direct mail measurement closely, search marketing has historically been given too much credit for an action initially triggered by a direct mail campaign. To unpack that sentence a little; if a consumer receives a direct mail piece and is then driven to visit a website or landing page or walk in store to make a purchase, the direct mail piece seldom gets the credit it deserves for inspiring the action. It’s this very early stage of the engagement process that many marketers have been over looking when measuring a campaign’s success.
This is why targeting is such an important part of the process. Who exactly are you trying to reach? Where do your consumers live? Where do they work? The better you know your target audience the better placed you are to engage with them and understand their purchasing behaviours.
The 3 methods most widely recognised for measuring the success of a Direct Mail campaign are:
Cost per Acquisition
A pretty simple equation but invaluable for measuring the success of your campaigns. Take the cost of your mailing and divide it by the number of responses you receive. This will give you a good insight into the cost to acquire new customers vs the profits you will receive. If the latter exceeds the former, it’s a pretty good start.
Cost per item
Another very easy calculation to make, take the total cost of your mailing and divide it by the total number of items sent. If you spend £2000 on a mailing and you send 1000 items then the CPI would be £2. It’s an important figure to be aware of as by reducing the CPI, the cost per acquisition can be negatively affected.
Response Rate
The third and final most common form of direct mail measuring is calculated by dividing the recipients that responded by the number of items sent. This is vital for planning future campaigns as well as setting realistic targets going forward.
Cost and postage incentives for Direct Mail campaigns enable you to maximise your value for money, as sorted mail into mailsort tranches allows you to benefit from the large volume discounts available.
This affords marketers the ability to refine their Direct Mail campaigns and really make it a targeted mailing, allowing the marketer to highlight recipients that would be considered the most likely to engage positively with their pieces.
As e-commerce and online retail continues to expand, carefully planned DM campaigns often act as a conduit for other media channels to flourish. Until now, measuring Direct Mail campaigns was a process littered with ‘blind spots’ that hampered marketers ability to see the real benefit that Direct Mail brings to the table. Whilst DM may have previously seemed less effective given the perceived negative results inaccurate measuring uncovered, the channel continues to be one of the most cost effective and engaging marketing tools in any marketing department’s arsenal.
Thanks for taking the time to read this blog piece, if you need any further info or would like to discuss your direct mail requirements, feel free to contact us on the office number: 0118 474 888 or email us at: enquiries@heraldchase.com
