May 8, 2018 • digitalmedia • marketing • Comments Off on Quantifying Direct Mail Campaigns
For top marketing strategies, print is non-optional. Nothing has ever quite replaced the appeal, flexibility, and effectiveness of print marketing. Paper is an evergreen marketing resource, and when aligned with a solid cross-media strategy, can play a significant role in helping gain, establish, and nurture client relationships.
However, print marketing can also be tricky. It’s one of your most expensive forms of outreach, and it needs to be worth the investment. Though the results of a campaign can’t always be predicted, and campaigns might take time to perfect, there are certain measurables that can help you assess your return on investment (ROI). Here is how to measure and shape a campaign to work for you.
Before you can know whether a campaign has worked, whether to change course, slim down, or expand your efforts, you need to begin with a little math. First, you’ll calculate your B/E close rate. “B/E” stands for “break even.” If your close rate is the ratio of resulting sales or profitable commitments to mailed pieces, your B/E close rate is the ratio of sales to mailed pieces necessary to break even with direct mail expenditures.
For example, if a hospital sends out 2,500 pieces of mail at a production, materials, and postage cost of $4.30 per piece, the campaign will need to generate $10,750 ($4.30 x 2,500) in revenue to break even with expenses. Now let’s say that each ask in the campaign is estimated to bring in around $250 (minus any fulfillment costs). This means that the campaign will need to garner 43 (10,750 / 250) profitable commitments to break even, to make a B/E close rate of 43 over 2,500 (sales/pieces of mail), or 1.7%.
In other words, at your B/E close rate, the revenue gained, and total cost of the campaign is the same. Your “break even” close rate lives up to its name. But of course, the goal is not to break even. The goal is for your actual close rate to be higher than your projected B/E close rate. If so, that’s a good sign.
There’s more to assessing the success—or potential success—of a campaign than whether it exceeds your B/E/ baseline. You also need to put these ratios in perspective in light of where your company is in its lifecycle. If you’re a startup, undergoing transition, considering a merger, changing management, renovating your marketing strategies, refreshing mailing lists, reaching out to a new audience, etc.— times when your identity or targets might be under development—it will take longer to determine success. Failures, successes, and progress must be measured over time. Even in times of stability, there is a learning curve with direct mail.
This is also an ideal point at which to consider hiring a marketing partner. Particularly at crucial transition points and when your outreach needs refreshment, investing in help from integrated solutions experts can shorten the learning curve and save you time and resources.
Set yourself up for success by preparing the ground for a great campaign, and take the time to calculate what you need in each of the following areas before beginning:
Mailing lists. How viable are your mailing lists, and when was the last time they were updated? They should be pristine, one-hundred percent accurate, and honed to your desired target audiences. Don’t neglect to check your sources and be certain about the dependability of your sources for names. Your carefully-crafted, beautiful campaign can flop due to a mailing list that is too generalized or too specific, incorrect addresses, or inaccurate names or titles.
Seed mail. Not everyone tries this, but it can be a smart idea. Seed mail is a way of testing the state and appearance of your mail upon arrival rather than leaving it to chance. This is an especially good idea if you send the design to the printer and then never see it again.
For local mail-outs, you can “seed” your campaigns to various people you know in the locality (family, friends, etc.) who are willing to report back to you on the following questions:
For mailings within a wider geographic reach, US Monitor and similar services report back to you on arrival times for each locality.
Frequency. There is a proper and improper frequency for direct mail. This is another metric that should be taken over time, taking into consideration response rates, and potentially combined with customer feedback. However, receiving help and professional advice on the front-end can prevent problems in this area.
What’s gained slowly is less likely to be lost quickly. Direct mail is a significant investment, and it often doesn’t pay to “bet high” right away. Crafting and assessment are key. Start with a small campaign of a few hundred pieces. Once you reach and begin to exceed your B/E close rate, slowly increase your campaigns and watch the results.
When you start seeing success, it may be tempting to leap from 500 to 5,000 mailers, assuming revenue will increase in proportion. But direct mail can be a complex, if often profitable, and how it works for each organization will differ, and may even differ at different seasons of development and growth. And dramatic swings in sample sizes (even if those sample sizes represent success) can skew data. A steady approach, collecting consistent, accurate data over time, will give you a far better handle on what you’re working with, and increase your chances of a positive ROI.
To work with an inventive and reliable partner on your direct mail needs, contact one of our consultants at Fontis Solutions. From production to analytics, we are experts in fully integrated business and marketing solutions.
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