Step 5: Measure Your Results
It’s easy to measure the success of a direct mail campaign. To get your conversion rate, divide the number of mailers you sent out (e.g., 30,000) by the number of people who responded to the mailer and became an actual lead (e.g., 1,000). To get your CPA, divide the total cost of the campaign (e.g., $50,000) by the number of leads obtained. (In this case, if you obtain 1,000 leads at $50,000, your CPA is $50 per lead. If 200 of those leads convert to customers, your cost-per-sale is $50,000 ÷ 200 = $250.)
You should run several test campaigns to see whether direct mail will work as a marketing tool for your types of products or services. You need to measure the response rate you get from direct mail to see whether it produces a significant ROMI for you. The more expensive your product—or the more money you plan to make from the client using a long-term service like insurance—the higher your ROMI will be, and the more you will be able to justify the cost of using direct mail.
› › › What You Should Know ‹ ‹ ‹
To review, here is what you should know about direct mail marketing:
While direct mail marketing is an old-school tactic, it can still be a highly successful lead-generation tactic. People have a more positive reaction to receiving direct mail pieces in their mailbox than they do to receiving marketing e-mails in their inbox.
Direct mail is very effective for selling products or services where customers need to think seriously about the offer before accepting it. It is also effective for selling complicated products or services that require a good deal of explanation.
Direct mail often requires a large, up-front investment in printing and shipping. Therefore, you should engage in direct mail only if you are selling an expensive product, or a product or service that will provide a significant ROMI over the long term.
When you obtain a targeted mailing list for your direct mail campaign, a rented list will be more expensive but more accurate than a purchased list. However, when you use a rented list, you usually do so with the understanding that you will send only one mailing to each recipient on the list.
Direct mail pieces can include postcards, flyers, sales letters, brochures, and dimensional mailers. Usually, some creativity helps in reaching out to your potential customer. The more personal you can make a direct mail package and its accessories (e.g., a landing page, a personalized tchotchke or toy), the better your chances of catching your potential customers’ interest and turning them into actionable leads.
Direct mail is very difficult to test because it is so expensive, and because you must print and ship a large number of creatives to get a measurable response. A good strategy for testing your direct mail campaign is to target regional markets and measure the response to your offer in those markets.
When measuring your results, measure the overall cost of the campaign against the number of products or services sold to determine your cost-per-action. Then compare the CPA against the purchase price of your product (or the long-term income that results from your product or service) to determine whether your ROMI justifies the use of direct mail.