After putting a lot of time and effort into your direct mail marketing campaigns, it is only natural for you to determine if your strategy succeeded or failed.
That is where direct mail marketing metrics can help.
These metrics will provide you with information on what figures to look for and whether your campaign has been received warmly by your audience or if it still needs improvements in engaging your customers.
Direct mail marketing definition
Direct mail marketing is the act of delivering a promotional printed piece to a target market. These pieces could be brochures, catalogs, postcards, magazines, newsletters, sales letters, etc.
This strategy is one of the most efficient and profitable ways to reach out to new and existing clients because it allows you to communicate one-on-one with your client.
It also lets you target prospects with precision. You can control who receives your message, when it’s delivered, what’s in the envelope, and how many people you reach.
Why is it important to understand your direct mail metrics?
It is important to measure and understand your direct mail metrics because the information you find can have a significant impact on your next marketing campaign.
Sometimes, it is easy to assume your direct mail campaign is a success when you see an increase in sales or leads. But there are chances where your campaigns can be more or less successful than they appear on the surface.
A smart marketing strategist will take the time to set up a detailed tracking method so that they can accurately measure the performance of their direct mail campaign.
Common metrics used to measure and analyze direct mail marketing
Direct mail marketers use different metrics to track the performance of their campaigns. These metrics usually focus on the number of pieces sent out to prospects or clients.
As every business is different, you need to use metrics that work best for your company and could give you data where you need it most.
Here is a list of direct mail marketing metrics that matter most in your marketing campaign:
Response Rate
Response rate is the percentage of people who gave a reply to your direct mails. It is the calculation of the results of your direct mail efforts.
This is the most common metric to analyze because it is the easiest one to calculate. To determine your response rate, divide the number of responses you have received by the number of mails you have sent.
For example, if your team sent 10,000 mails or items to your leads and received 300 responses from them, your response rate would be 3%.
Cost per Acquisition (CPA)
Your cost per acquisition will tell you how much you have spent to get new customers. This metric could be used in your other marketing efforts to compare which approach is more cost-effective.
To find your CPA, you should divide the total campaign cost by the number of orders you have received. If you need to spend a higher amount of money to make an appealing offer to your leads, the cost to earn a customer may be higher.
After finding your customer acquisition costs, you can analyze if the money you have spent is worth it to bring in new customers. Most of the time, that depends on your profit margin and the repeat business you are expecting from a client acquired through direct mail.
Customer Lifetime Value (CLV)
Finding out your customer lifetime value is a bit more complicated than the other metrics, but it is one of the most important to measure. This tells you how much revenue you can expect from a client during their lifetime.
The longer a buyer has been purchasing from your company, the higher their CLV. Market strategists use this figure to identify the segments each customer belongs to and how valuable they are to your company.
To calculate the CLV, you have to take the total revenue you made from a client and subtract from that the costs of acquiring them.
For example, you spent $10 to bring in a customer and they remained a loyal buyer for 5 years spending a total of $500 on your business. Subtract your $10 from $500 and you get $490 as the customer lifetime value.
Return of Investment (ROI)
Measuring the return on investment is important in every business. This will give you details on the outcome of your direct mail marketing campaign.
To know your ROI, you have to take your revenue and subtract the total cost of your campaign. Then, divide that number by the campaign cost. To understand this clearly, here’s an example:
You were able to earn $6,000 on your direct mail marketing campaign that cost you $5,000. Subtract those two from each other and you have $1,000. Now divide $1,000 by $5,000 and you’ll get 20% as your ROI.
Measuring your ROI, along with the other metrics listed above, will give you a quick idea of how successful your campaign was overall.
