How to Measure Your Direct Mail Campaign
Executing a direct mail campaign is a relatively easy task, but unless you have put some simple, tactical measures into place first, measuring the campaign results can be difficult. Like many other marketing strategies, direct mail may not work well with all audiences or in every industry, and it usually performs best when you execute it with supporting campaigns, such as emails, phone calls or online marketing tactics. If you are unable to measure the results of your direct mail campaigns, you may be throwing money away on ineffective marketing strategies for your business.
Plan your direct mail campaign’s tactical strategy. Unless you design the campaign around a direct mail response from the consumer, such as mailing in a form, you will have to put other strategies into play so that you can determine how many sales or leads the campaign generated. This could be in the form of a promotion code, a custom URL or dedicated phone number for the campaign -- or a coupon or certificate the consumer presents upon purchase.
Put measures into place to ensure that appropriate personnel know what they should track during the campaign. If you have a customer service center that takes orders over the telephone, for example, the representatives must know to ask for a promotional code and have reporting mechanisms in place.
Determine the response rate, which is the number of sales made or leads generated depending on your campaign’s goals, to your direct mail campaign. If you sent out a mailing using a promotion code to help track the results, divide the number of sales made using the code by the total number of mailers to determine the rate. If you sent out 2,000 mailers that generated 42 sales that used the promotion code, your response rate would be 2.1 percent.
Study your historic sales data, if available, to determine what your average base sales would be during the time you plan to run your campaign, absent of any other marketing activities. If you plan to execute a direct mail campaign during the first week of September, for example, review to sales for that month in the prior years.
Execute your campaign and wait at least one to two weeks before you attempt to measure the results. Like other print media, direct mail campaigns do not always have the immediate effect that a television commercial or online promotion has.
Compile the total sales during the campaign’s life cycle and subtract that base volume that you calculated from the historical sales data to determine incremental volume, or sales that your direct mail campaign most likely generated.
Break your direct mail list into one small group, called the control group, and a larger test group. Ensure that both groups are demographically similar for more accurate results. This type of measurement method works best with in-house lists and in industries where you can easily track who purchases your products, such as a catalog business.
Send your direct mail piece to the test group, but do not send or any other marketing materials to the control group.
Calculate revenue per customer. Determine total revenue for the control group during the campaign and divide that figure by the number of people in the group. Perform the same calculation for the test group. If your control group consisted of 100 people who purchased $2,000 worth of products during the campaign, the revenue per customer for that group would be $2,000 divided by 100, or $20.
Subtract the revenue per customer of the control group from the same figure with the test group. If your control group’s revenue per customer was $20 and the revenue per customer for the test group was $50, your incremental revenue per customer as a result of the direct mail campaign was $30
(Theo Rick Suttle, Demand Mania)