The Elements of Measuring ROI on Direct Mail Campaigns

Marketing departments, in general, and especially direct marketing departments are under considerable pressure to quantify the ROI from marketing efforts. Luckily, direct mail is still the King of Measurement when it comes to return on investment and is much easier to track, and report, on than other marketing forms, such as brand advertising.

You must plan your campaign’s tactical strategy well, so the marketing ROI can be calculated accurately. While some campaigns may be more straightforward than others, with a simple response form that can be easily tracked, most campaigns will be more complex. They direct marketing pieces will, likely, include various options to respond either online, via telephone or with the use of a voucher/certificate to be used in-store. There must be measures put in place to ensure accurate tracking, before the campaign is executed. Promotional codes and custom URLs need to be put onto sales systems, as well as communication and training for personnel involved in order processing.

Trackable direct mail methods

As a golden rule for direct marketing pieces, you need to make sure all points of contact are listed. Whether your trackable methods include phone numbers, URLs or more – this is where you can attribute leads and sales to a campaign.

Phone number

One of the easiest methods to measure your marketing ROI is through a number. Make sure you have a unique number for your direct mailing, and you can measure who responds. You can do so via several formats:

• Set up a dedicated number that automatically forwards phone calls to your company’s original number, determining the response rate.
• Enlist the services of a call tracking software company, who will provide you with analytics and even the ability to playback the calls.
• For companies using their regular business line, make sure all staff are up-to-date on the offers for each direct marketing piece.

URL

Including a specific URL on your direct mail marketing, leading onto a custom landing page, is an easy and highly-accurate form of calculating ROI. If you create a custom URL, unique to the campaign, you can then use your site’s analytics and track the number of people visiting the page, due to the mailing.

You could even go so far as to personalise the URL for each mailing, taking the prospects to a page solely constructed for their needs.

QR codes

QR codes are a more modern addition to direct mail. As a mailing house, we have noticed a boom in the number of companies utilising the potential of QR codes – especially with the popularity of Snapchat and the like. When someone scans the QR code, you can measure the number of people visiting the site or responding to your call-to-action. Similarly, this trackable method encourages engagement with the unique interactivity, which can only prove positive for your campaign.

Discount codes

Discount codes are wholly successful for direct mail marketing, as everyone loves a freebie. You can check who has redeemed the voucher on your website, over the phone or even in-store.

Not all campaigns will have direct purchase outcomes and, in this case, indirect purchases and intangible benefits. These are necessary to marketing measurement and your ROI calculator.
There are 3 important elements to include when calculating true ROI:

• Actual marketing campaign costs
• Actual campaign income
• Intangible campaign benefits

Actual campaign costs

The actual marketing campaign costs are crucial to include in your marketing ROI calculator. It’s likely these costs will vary with different companies and mailing houses. Examples of these direct mail costs include (but are not limited to):

• Data cleansing
• List acquisition
• Creative design fees
• Copywriting fees
• Packaging
• Printing
• Postage
• Processing fees

Actual campaign income

Using tracking codes, custom URLs and telephone numbers mean that measuring ROI for specific campaigns is easier. However, it’s important to note that the actual income of a direct mail campaign may also include derived sales – additional items purchased, as well as promoted products. You may also need to look at trends, for example, when comparing sales from a particular data set last month, with the current sales following the direct mail campaign. This is not as accurate but should be mentioned in reporting, particularly if there is a significant shift in trend not necessarily directly linked to the campaign’s tracking codes.

Intangible campaign benefits

There are many intangible benefits that can be directly attributable to a campaign. Here are some examples:

• Data accuracy: As a result of cleansing data for the campaign, the data will be of better quality and available throughout the company for other initiatives
• Customer satisfaction: If a campaign is managed well, customer satisfaction can be improved. In turn, this will have a positive effect for the whole company and future direct mail campaigns. It is, however, hard to measure.
• New prospects: A campaign may generate calls, email queries, newsletter subscribers etc., which can be used for future campaigns.

There are many other advantages that may arise from a direct mail campaign, and each campaign will have a specific outcome to consider. For more information about our direct mail services and advice on maximising ROI from a direct mail campaign, please contact us on 0191 487 5148.