One of the most crucial elements of any marketing campaign is the measurement phase. With all the time and resources that go into producing your campaign, it’s imperative that you assess just how successful that campaign actually was. Without effective measurement, how do you know if that campaign is worth repeating?
This applies to all formats of your marketing campaigns, including direct mail. Direct mail produces strong results with surprising audiences, but how do you actually measure those responses? What are some key metrics that you should be tracking with your direct mail campaigns?
How Do You Track Direct Mail Pieces?
As you plan your direct mail piece, determine the goal of the mailing. Is it a fundraising appeal asking your audience to make a donation? Are you selling something? Do you want the recipient to visit a website? What is the action you want your audience to take upon receipt of the mail piece?
While your answer will determine whether you need a remit slip or a link to a website, or a promotional code for in-store purchases, they all have one thing in common: an appeal code. This code is how you can keep your campaigns separate in your internal reporting, and should be included on whatever action item you’re hoping to spark from your audience.
If you’re asking your audience to send back a remit slip, make sure the appeal code is included on the remittance form. If you’re directing your audience to a website, make sure the code is included in the URL, using a tool like Google’s URL Builder (you can then use a custom URL shortener like Cutt.ly to hide the tracking information and make it easier for your audience to type).
You can get as detailed as you’d like with your appeal codes; you can run one for your entire audience, or you can segment your audience with a separate code for each segment. The more you segment your audience, the more detailed your reporting will be.
For example, suppose you were planning a mailing to all households in Delaware. You could create one code for the entire campaign, or you could create separate codes for each ZIP code to better understand how the piece performs across different parts of the state.
Appeal codes can be anything from actual words to seemingly random sequences of numbers and letters. As long as you keep track of what segment each code corresponds to, your reporting will reflect these figures.
Can You Track When Your Pieces Are Delivered?
Did you know that it’s possible to receive notifications for when your mail pieces are delivered? The United States Postal Service offers a service called Informed VisibilityⓇ Mail Tracking and Reporting (IVⓇ-MTR).
This service gives you near real-time updates as to the location of your mailing. This allows you to gauge when responses may start coming in or can allow you to better time the deployment of additional multichannel marketing campaigns like email or social media messages.
Contact us to see if delivery tracking is right for your mailing.
Which Direct Mail Metrics Should I Track?
There are some baseline figures you’ll need to know in order to process many standard calculations. While there are many database solutions that can help you keep track of your numbers, you can easily record your numbers in a spreadsheet like Microsoft Excel or Google Sheets, as these will allow you to create simple formulas to calculate your metrics.
You should keep track of the following metrics in order to properly process your calculations. If you’re breaking your mailing up into multiple segments, you’ll want to keep track of each metric for each segment (and then an overall total as well).
- Total Pieces Sent. This may seem obvious, but it’s vitally important to keep an accurate count of how many pieces you’ve sent out. This provides you with your baseline and is included in most of the calculations you’ll want to measure.
- Cost of the Mailing. This can be broken down into itemized costs for production, printing, and postage, or it can be all lumped together into one figure. Either way, this is crucial to understanding your return on investment, or ROI.
- Total Responses. This is why your appeal codes are so important, as they allow you to assign a response to a specific mailing. If you’re requesting donations and a check comes in without an appeal code, how do you know what sparked that person’s desire to make a gift? Similarly, if you’re directing individuals to your website, having added the appeal code using the URL builder will tell you what traffic to your site is attributable to that mailing.
- Revenue Generated (if applicable). This is simply the amount of money that comes in as a result of your mailing.
You Have Your Data. Now What?
Now comes the fun part: turning those metrics into calculations. You want to be able to compare rates instead of raw numbers, as the percentages will help account for things like different size mailings.
To your spreadsheet, you’ll want to add in columns to calculate the following:
- Response Rate. To calculate this percentage, simply divide the number of total responses by the number of pieces sent, then multiply by 100. Response rates vary across industry, purpose, and the source of the mailing list, but a 5% response rate should be your goal.
- Cost Per Piece Sent. This is found by dividing the total cost of the mailing by the number of pieces sent. This helps you keep track of how much you’re spending per recipient. Costs here will vary based on factors like the type of postage, materials in the mailing, and the type and size of the mailing itself. For high-value items, you can spend a little more knowing that the return is expected to be greater.
- Revenue Per Response. Take your total revenue generated and divide it by the number of responses received. This allows you to see what the average response is, and if your total revenue is skewed by having a few large or small transactions that serve as outliers.
- Return on Investment (ROI). Take the revenue generated and divide it by the total cost, then multiply that by 100 to get a percentage. Obviously, the larger this number, the greater your return. If it’s a negative number, then the mailing is costing you money rather than making it.
Why These Direct Mail Metrics Matter
By tracking these eight metrics, you’ll not only gain an understanding of the effectiveness of your campaign, but you’ll also be able to pinpoint the “why” behind them. For example, if you have a negative ROI, you can measure the cost per piece against other campaigns to see if you were too ambitious with the design of your mailing. Or if your overall revenue was up, you might measure the average transaction to determine if the larger revenue jump was due to a single large transaction.
Now that you know what to look for in your next mailing, make sure you’re working with a partner who knows all the ins and outs of direct mail and can help craft the right campaign for the right audience. Contact Associates International today to learn how we can optimize your direct mail game.
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