Before the internet triumphed over most other marketing methods, direct mail campaigns were a popular way for businesses to find new customers. Once digital marketing became more prevalent and offered easy ways to measure campaign success, direct mail campaigns were thrown by the wayside.
However, they’re now making a comeback, with many business owners swearing by them for high returns on their investments and better engagement. While you might be wary about trying direct marking out of fear of being unable to measure success, it can be easier than you think using these methods below.
Calculate the Response Rate
Any business owner trying to drive leads by mail may learn how successful their direct mail campaigns are by using the basic response rate benchmark. Any business owner can calculate the response rate of a direct mail campaign by dividing the number of responses by how many fliers or mailers they send out. Once multiplied by 100, you have your percentage. With this information, you can determine whether it was a successful enough marketing method for you to try again in the future.
Work Out the Conversion Rate
People responding to your mailers aren’t necessarily people you’ve converted into customers. That’s where the conversion rate comes in. This calculation helps you learn how many people who received and responded to your flier became loyal customers of your business.
You can use the same calculation for conversion rates as you did with the response rates without the need for digital conversion tools: divide the number of conversions by how many fliers you sent out, multiplied by 100.
Calculate Your Return on Investment (ROI)
Cost is any business owner’s primary consideration when choosing any marketing method to use in their business. You don’t want to spend too much if you don’t get that money back in sales. You also don’t want to spend too little in case you don’t reach as many people as you hoped.
That’s why it can be helpful that you’re able to calculate your ROI with a direct mail campaign. You can test the water with your initial campaign to help you find the numbers that work for you. Use this simple calculation to determine your ROI: the net profit divided by the overall campaign cost multiplied by 100.
Determine the Customer Acquisition Cost (CAC)
Customer acquisition cost refers to how much it costs a business to acquire new customers. This information can be important for ensuring you’re maximizing your profit potential with any campaign you launch. After sending out fliers as part of a direct mail campaign, you can use a CAC formula to determine how much you’ve spent to welcome new customers into your business.
The cost of your direct mail campaign / the number of customers acquired
There is no single ‘good’ CAC figure to aim for since this can vary for different industries and marketing strategies. However, the customer acquisition cost to lifetime value ratio of 3:1 is widely accepted.
Measuring the success of your direct mail campaigns might seem complicated when you’re used to digital marketing platforms doing it for you. However, once you use these formulas above, you might be surprised by how straightforward it can be.
