Make The Most Of It: Direct Mail ROI
In the last of this series on direct mail, we’ve focused on maximising your Direct Mail ROI (Return On Investment).
The previous three parts have discussed:
- Part 1: (Direct mail advertising – the top five reasons to start a campaign)
- Part 2: (Pinning your direct mail ideas down: nailing the brief)
- Part 3: (Direct Mail Campaign Planning: Get it Right)
For direct mail to benefit your bottom line, you’ve got to make sure your campaign is working as hard as it can – and that means analysis and follow up. Measuring direct mail ROI will help you increase your returns for your next campaign, and you may also be able to improve your current one while it’s still running.
Don’t launch without factoring in these important measures:
What level of response should you expect?
With most Direct Mail, you should expect a response rate of 1-5%. When budgeting for your campaign and calculating the expected ROI, it’s standard to use a 2% figure for cold targets and a 3% target for warmer targets – those people who already have some contact with your business.
It’s not just about the number of responses though; think about the quality too. If you’re designing a lead generation campaign which offers a freebie, you may get many more responses than an order generation campaign which asks people to part with cash – people are likely to find it easier to say yes. But you’ll get an immediate financial return on orders: your customers have given you their money. Whereas new leads, while powerful, will require follow-up work to convert into sales. Consider your campaign objectives and set targets in-line with those.
Tracking direct mail responses
To know whether your campaign is working, you need to track the response rates. The simplest way to do this is to include a call-to-action directing people to a landing page, trackable phone number or reply slip set up specifically for your campaign. You’ll then be able to monitor the level and timing of responses.
If you want to conduct deeper analysis on your responses – for example to check which demographic groups were most responsive – you can issue unique identifiers on your mailing, which people enter as they respond by phone, text, web link or reply slip.
A/B testing
A/B testing enables you to test one element of your campaign against another. It is the only way to do research in the field, increase your understanding of your audience and what works for them – in short it’s vital for increasing your Direct Mail ROI.
You can test anything, at any scale. Recently, a client A/B tested the design of their campaign and found that version A provided twice the ROI of version B. That was a simple snapshot based on just a week’s responses.
If you want to go big, you can A/B test any element of your campaign by using representative samples of your target population.
Depending on your campaign objectives, you could focus on:
Copy: try new headlines or testimonials within your message
Offer: change the price or incentive
Design: different colours or print formats
Timing: weekend vs weekday, or seasonal
Make sure you have distinct landing pages or response forms for A and B so you can check which version is pulling more leads.
You can use A/B testing within a campaign by running prototypes with a small sample and testing variable A against variable B. The main campaign, with a larger target mailing, will then receive the most successful version. And, of course, A/B testing is critical research for future and follow-up campaigns.
Use your mailing to invite leads to update their details, and monitor the number of returned mailing you receive. Investing in a good CRM software will make it easier to keep track of your data and update seamlessly.
If you found a campaign performed badly against expectations, you’ll want to review your buyer persona to check it matches up with your offer – and either revise your target list or your offer as a result.
Follow up
Targets may require multiple contacts before they take action. You’ll get the biggest ROI if your direct mail campaign is one of many channels in operation. Converting targets to leads and leads to sales is a process rather than a one-off event.
Build a follow-up process into your campaign, whether that’s follow-up mailings sent out a couple of weeks’ later, phone calls, social media or email contact.
The real strength of direct mail is in cutting through the digital noise and reaching your target directly. Offering a choice of digital or print response makes it as easy as possible for them to act, increasing your direct mail ROI. Used tactically in combination with digital and social channels to boost brand awareness, direct mail is a powerful way to generate new leads and sales.
Contact us for more on crafting the right campaign for your business.