Direct Marketing Return on Investment
Measuring Direct Mail ROI
Knowing your return on investment is critical to developing a long term marketing strategy.
Direct mail marketing may include a postcard, printed brochure, promotional catalog, or sales letter that goes in the USPS mailstream to a list of customers you have in your database or from a list developed by data experts. Measuring the return on investment (ROI) for direct mail helps you to evaluate the success of the marketing campaign. Measuring ROI helps marketing managers and business owners create repeated successful campaigns in future direct mailings or to optimize campaigns to increase response rates and boost the lift ROI.
Ask a Spectrum marketing expert to share one of our proven direct marketing campaigns in your specific industry.
STEP 1. Determine how much money was generated from the campaign.
In order to accurately calculate how much revenue was generated from the direct mail campaign, you have to track the sales as they occur. So, make sure you have a measurement tool and plan set in place. You’ll want to build in tracking mechanisms into the mail design. For example, you can add a trackable QR code or Flowcode, create a specific landing page URL just for the specific campaign, add a call tracking phone number, or even use a special promotion code – common on many direct mail postcards or catalogs. When the customer places an order by phone or online, those metrics are all added up to determine sales generated.
STEP 2. Calculate your total investment in the direct marketing campaign
It’s important to factor your expenses into the equation. Make sure you add all the costs incurred for creating and sending the mailer. Your costs may include graphic design fees, printing and productions costs, list purchase or development, and of course, postage. You may also wish to include your personal time sourcing and working with a service provider as a relevant cost. For example, if your rate is $70 an hour and it took you three hours to coordinate the creation, targeting, and execution process then add $210 to the total investment cost.
STEP 3. Calculate the profit or loss of the campaign
Now that you know your investment costs and the total amount of sales, subtract the investment amount from the sales total. If the resulting number is positive then the return on investment from the direct mail marketing campaign was a profit. Hooray! If the number is negative, then unfortunately, the return on investment is a loss. For example, if your cost to send the direct mail pieces was $3,000 and $4,200 in sales came from the campaign, then your profit is $1,200 ($4,200- $3,000 = $1,200).
A new way to way to measure direct mail ROI and attribution
With Spectrum’s omni-channel direct marketing solutions, Spectrum MailPlus, clients gain access to campaign reporting in our online marketing dashboard.
Easily monitor each element of your campaign online LIVE and download your attribution data and share with your data analysis or sales team. Learn how many people received your mail and engaged with your website, social, calls, text response tracking, and more.
Tools like our marketing dashboard make it easier than ever to determine your direct marketing campaign attribution and ultimately return on investment.