How to Calculate ROI of Direct Mail Advertising

All things you do in business must generate an ROI (return on investment). Whether you are putting in effort, time, money, or additional resources, it only is worth your while if you’re able to see results. It often is hard to measure the return on investment of a direct mail campaign, although, because you do not always know why and how customers wind up coming to you for services or products. Some things you may want to measure include:

  • Gross response (overall response rate)
  • Recipients who become customers (your conversion rate)
  • Campaign cost / the amount of enquiries you receive (The cost of each lead generated)
  • Cost of every acquisition (you either can measure the campaign cost divided by the amount of customers you receive or amount of sales you make, depending upon the product offering)

To do any of those things, you require information in regard to how well every direct mail campaign is doing, and what channels generate the best results. Here is how to collect that information:

Add personalized URL

You may do this one of a couple of ways:

First, you may develop a certain URL for every campaign; therefore, potential clients who have a desire to gain more details or buy something visit the URL and you may receive statistics on how many individuals do so.

Second, if you are personalizing the campaign you must produce/print material that has variable fields anyway; therefore, you may as well develop an individual URL for every client. It may be as simplistic as producing URLs that end in special codes relating to the marketing database, yet that won’t just offer you the numbers which respond yet will inform you who were the prospective clients which viewed the website.

Utilize Unique Offer Identifiers

Activation cues or unique offer identifiers allow you to expand your information gathering beyond the Internet element of direct mail campaigns. If the campaign promotes a product which the customer must buy in-store, offering a unique activation code (that is included on the material in conjunction with the associated personalization) a customer presents at the point of purchase allows you to know who purchased what, at what location it was bought from and date it was collected.

It’ll give you valuable insight into if the campaign was instrumental at driving the purchase, and information on which or your locations generate the best return on investment for direct mail campaigns.

QR Codes

Blogs have been written on the advantages of using quick response (QR) codes in direct marketing, to connect the offline and online elements of every campaign. Especially for mobile users they offer a dirty-and-quick way to get them to your site, opposed to either requesting that they go to your website and choose a certain page, or enter in an extended (or complex) URL. A user scans the code using a smart phone and is immediately taken to the page in question. You either can have all visitors come to the same landing page and merely count page impressions, or create customized landing pages.

One nice in-between option includes using QR codes to bring a user to the landing page then offering something on that landing page which gets the visitor to offer up their email address or additional contact details to retrieve or download it. It’ll give you the best of both worlds as it’ll come to measuring your return on investment: An easy-to-set-up and quick method of bringing a user to your website, statistics on the amount of individuals who visit, and in-depth contact details for leads you may go out and then convert.

Warning

You might not have the ability to relate some sales right to a certain campaign; therefore, calculating ROI isn’t a science. Calculating return on investment is more of an estimation than a precise calculation. For instance, getting a catalog inside the mail might prompt the customer to buy something, yet they might enter the business site address right into the browser, place an online order and not utilize the promotional code offered on the back. For that reason, some businesses measure the sales which occur for a certain time period after the mailing goes out which can’t be attributed to additional campaigns.