The Secret(s) Behind Measurements of Direct Mail Success

How to Understand & Improve Your Print Mail Campaigns

We’ve said it before – direct mail is a powerful tool. Whether you’re trying to connect with Gen Z or Baby Boomers, almost anyone and everyone can be persuaded by its effectiveness, if well-executed. So, how do you determine if your direct mail campaign is working? Let’s discuss some measurements of direct mail success…

Response Rate

Direct mail response rate is, simply stated, the percentage of people who respond to physical mail pieces (which could be postcards, letters, flyers, dimensional mail, and so on). Responses could come from things like website visits through QR codes or URLs, business reply cards (BRCs), or even coupon code uses and coupon scans. Response rate can help determine which part(s) of your direct mail marketing campaign are working, and what areas need improvement.

To calculate the direct mail’s response rate, use the formula:

Response Rate = (Responses / Mail Pieces) x 100

Let’s look at an example of equating response rate. Let’s say you send out 1,000 pieces of mail advertising the grand opening of your new grocery store, and you receive 30 responses. You’d determine your response rate using the following formula:

(30 responses / 1000 pieces of mail) x 100 = 3%

Keep in mind, the average response rate of direct mail falls between 2.7% and 4.4%, so don’t be deterred by seemingly “low” numbers. To best ensure you’ll be able to calculate and understand response rates, make sure each direct mail piece has a clear call-to-action (CTA). Whether that’s a special offer, coupon, or link to a landing page, it’s important to include identifiable URLs that you can easily track – like UTMs, PURLs, or specified QR codes. Or, make sure they can easily respond via a business reply card. This ensures that, even if the recipient doesn’t take full action, you’re aware of whether they made action at all, if you sparked their interest, and if you’ll possibly remain on their radar.

The call to action (CTA) is the driving force behind a successful landing page. It propels users to act, with phrasing such as “don’t miss out”, “learn more”, “click here”, and so on. Landing pages should be designed with a single, concise call to action. Too many calls to action can create confusion, so again – stick to just one powerful, action-oriented verb that leaves no room for ambiguity. What you want the user to do should be simple and clear.

Return on Investment (ROI)

To calculate the direct mail’s return on investment, use the formula:

ROI = (Net Income / Expense) x 100

Let’s say, for example, you spend $5,000 on postcards. You find that the mailing brings in $15,000 in revenue. If you subtract the initial cost of $5,000 from the revenue of $15,000, you’ve made $10,000 in revenue. To calculate ROI in this instance, the equation would be:

($10,000 / $5,000) x 100 = 200%

So, you’d have an ROI of 200%!

And, if you’re looking to get some help calculating ROI, you can plug the above information into USPS’s ROI Calculator.

Conversion Rate

With the inclusion of CTAs in your direct mail pieces, you’ll be able to track conversion rate. Conversions are often purchases – but that’s not always the case. Sometimes, conversions are things like rewards program signups, app downloads, or referral requests. Either way, to determine your conversion rate, look at the number of people who responded to your mail in comparison to those who became customers (or signed up/downloaded the app/requested a referral).

To calculate the direct mail’s conversion rate, use the formula:

Conversion Rate = (Conversions / Responses) x 100

For example, let’s say 30 people responded to your postcard, and out of those 30, 6 people downloaded your company’s mobile app (the conversion in this case).

(6 downloads / 30 responses) x 100 = 20%

Your conversion rate comes to 20%. Plus, you now know which customers to continue to build relationships with and can (likely) turn them into returning customers.

Monetary Return

To determine the monetary return of each of your touchpoints, you’ll need the following information: sale price, number of mailings, response rate, and conversion rate. As noted above, response rate measures the number of recipients who responded to the direct mail piece, while conversion rate takes the percentage of people who converted.

Ways to Increase Campaign Effectiveness

Now that you can calculate your direct mail’s success, how do you increase it? We have a few recommendations to ensure you’re creating and sending ROI rich direct mail.

Tracking & Attribution

Understanding the health of your direct mail campaigns is easier with first-person information. As stated above, when designing your mail pieces, be sure to include QR codes, PURLs, a phone number, or another easy-to-follow CTA. Not only are you establishing trust between the recipient and your brand (by giving them the power to respond on their accord), you’ll also be able to track which recipients (and how many) are responding.

Design Compelling Pieces

It’s no secret that people love good design. It’s important to keep that in mind when crafting your direct mail. Keep your messaging short, sweet, and to the point, while creating a sense of urgency – don’t overflow the piece with too much content. If a piece would look and possibly perform better on a postcard than in a letter format, think through various shapes, sizes, and textures. Most importantly, use market research or previous data (if you have it) to understand and use what your customers best respond to.

Know Your Audience

Understanding the geographics, demographics, as well as psychographic behaviors of your target demographic is imperative to the details of your campaigns. The more information you have on your customers, the better you can reach and speak to them.

For example, let’s again say you’re conducting a grocery store grand-opening campaign. You’re aware your new neighbors are primarily millennials. So, you send postcards announcing the grand opening and include a redeemable coupon (that can be used online via QR code or in-store via postcard scan). Additionally, you include photography that best matches the demographic background of your target recipients. You’ve provided these highly tech-savvy millennials with two ways to access the deal, while still encouraging them, and those less inclined to visit online, to come into the store.

Looking Ahead…

Direct mail continues to provide valuable customer and marketing insights and can be a key player in your multi- and omnichannel campaigns. Even as the digital landscape continues to evolve, heavily due to privacy policies and laws, mail proves to be an effective outlier. And, it’s even more successful if it’s done well. If you’re looking to get started with direct mail, want to discuss the measurements above, or just want to talk more about marketing campaign options and tactics, connect with Strata’s experts today.

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