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3 Must-Have Direct Marketing Metrics

Wes Sparling

There are three direct marketing metrics that deserve our attention. Marketers always talk about the importance of measurement – and in today’s world of likes, impressions and other soft metrics – rightfully so. Tying sales to a specific campaign can be challenging. But direct mail is an exception to this rule. In fact, it’s the most measurable direct marketing channel out there, and it has the lowest cost per lead. When it comes to direct marketing metrics, the best results start with a true understanding of what’s working and what’s not.

The first question we hope to answer this week is what to measure, so with that, here are three metrics the majority of marketers push for:

  1. Gross response rates. This refers to the number of positive responses resulting from a direct mail campaign and typically occur in the form of an inbound call or a visit to a particular web page. Sometimes, though less often, there may be a mail-back component such as an application or form.
  2. Net response rates. This is sometimes called conversion rate or order rate. Net RR allows us to understand what percentage of the audience actually ordered. In most cases, it is calculated against the total quantity mailed. Order rate is usually calculated as a percentage of the response rate.
  3. Cost per acquisition (CPA). This is often considered the most useful metric. It allows us to look at the relative investment of marketing dollars across any tactic, including direct mail, and compare them. One tactic may produce a much higher response rate than another. If the order rate is particularly low for that tactic, the CPA may be too high compared to a tactic that produces fewer total orders but generates a higher conversion or order rate. CPA is sometimes called cost per order depending upon the category of business—and it usually reflects only the campaign marketing costs. A loaded CPA may include some level of business operating costs as well.

Direct marketing analysis is driven by specific response and conversion data only available through specific direct mail efforts. For example, a custom landing page that is only seen by recipients of a January 1st mail drop and custom phone numbers for the same drop will aid in response attribution. However, there will always be a lift in organic search (and possibly paid search) as a client’s prospects elect to use Google instead of the URL or phone number provided on the direct mail piece. There are ways to estimate this additional traffic, but it takes planning and agreement between internal stakeholders to determine how it should be accounted for. In addition, consumers may call a general toll-free number not associated with the direct marketing effort. This must also be addressed in a meaningful attribution plan.

So how often should marketers perform a thorough analysis of their direct marketing efforts? As in most cases, it depends. The majority of marketers review their campaigns and individual mailings regularly. In fact, many use a daily feed to project a response and verify it as the campaign moves along.

Large-scale campaigns are often better suited for quarterly planning and monthly execution. This allows for “big picture” planning and helps to avoid being overly reactive to the competitive environment. Ideally quarterly planning is a byproduct of an annual “big picture” planning session that includes sharing goals, objectives, budgets and projected tactics.

Click here for more information on our process and stay tuned for Friday’s post on what these direct marketing metrics mean for you.

link https://www.iwco.com/blog/2015/02/18/direct-marketing-metrics/
Wes Sparling


Wes Sparling

Wes is a former agency owner with 25 years of direct marketing experience. As Chief Marketing Officer, he delivers multichannel marketing strategies and solutions that drive business growth and generate top-line revenue for distinguished brands in industries including telecommunications, financial services, and healthcare. He is a father who also loves stream fishing for trout, rooting for the World Series champion Los Angeles Dodgers, and his three dogs.

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