The Science Behind Direct Mail ROI
Does Direct Mail Work for My Business?
There are many advantages of direct mail advertising. Measuring the response rates is one of the most attractive benefits of using bulk mail services. Smart marketers no longer rely solely on using the simple method of counting coupons. There are many tracking methods used by mailing companies such as:
- Database Matching – a database match is record matching. Most mailing services do not offer this measurement tool. Mudlick Mail uses proprietary technology that will match the mailing list records with a business customer database. Once the records are matched, a summarized report is provided on the following:
- new customer acquisition counts & rates
- net revenue from direct mail customers
- gross profit rate
- return on investment for direct mail and so much more.
DATABASE MATCHING CALCULATIONS:
Net Revenue X Gross Profit% = Actual Money Made
Gross Profit – Campaign Cost = Return on Investment
(ROI / Campaign Cost) X 100 = ROI%
- Call Tracking – call tracking is a common measurement tool. A unique local or toll-free number is assigned to your business telephone number. Basic reports provide insights on the number of phone calls generated from mail campaigns. More advanced call tracking features include access to phone call recordings and conversation analytics.
Conversation Analytics – How it Works
- Penetration Reports – penetration reports are used to track the integrity of your mailing lists and can be used to measure response rates by neighborhood, zip code and mail carrier routes. It’s not a secret, mailing campaigns that use personalized postcard messages and targeted direct mail lists get the best response rates.
- PURL’s – personalized URL’s (aka PURL’s) is another common method used to track small business ads. PURL’s are unique landing pages on your website. The PURL is displayed on the marketing flyers with the goal of driving prospects to your website. To measure performance, you’ll need an advanced web analytics service that tracks and reports website traffic (i.e. Google Analytics).
These are just a few techniques used by savvy marketers today to measure the real cost of direct mail (or benefit). Calculating your direct mail roi on a monthly basis should be priority. You’ll gain the insights needed to maximize your marketing dollars and align sales revenue with business goals. Other key factors to consider are the long-term value and profitability of your customers. How many times does a typical customer purchase your product or service in a span of one year? By projecting the long-term value of a customer, you begin to understand the importance of customer retention and the power of consistent mass mailing.
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Price includes (no contracts or volume commitment)
Compared to emails sent to existing customers, direct mail has 30X
the chance of receiving a response from the customer.
Direct Marketing Association
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