Weighing Direct Mail Success (A Long-Term View)


Weighing-direct-mail-success-a-long-term-viewIn today’s market, any form of marketing has to pull its own weight. Businesses can’t afford to engage in marketing efforts that don’t produce. But calculating the effectiveness of your direct mail efforts can be a little more involved than it appears on the surface. How do you weigh the success of your efforts?

There are a number of ways to define what makes a mailing successful. For many companies the first measure of success for a direct mailing is how much revenue it generated. How much money did the mailing bring in? Can you trace specific sales (or donations) back to a specific mailing? This is a perfectly acceptable measurement. This is easier to track for retail type items or for donations. It’s not necessarily a good measurement for high-ticket items or things that have a long sales cycle (nobody is going to buy a house or a car based on one direct mailing).

That’s why it’s also important to look at things such as lead generation. The goal of your mailing may not be to make a sale. It may be to generate qualified leads for a high-ticket, long sales cycle product or service. If all you measure is revenue, your mailing may look like a failure. If it generates a good number of qualified leads (and you have to define the goals for both of those), your mailing could be a roaring success—even if it generates no cash at all.

That leads us to a third criterion for evaluating the success of a mailing: Return on investment (ROI). This can relate to either revenue or lead generation. Let’s begin with revenue, and say that you’re selling enterprise software. What if your mailing costs you $25,000, but only generates 1 sale? Is it a success or a failure? Of course that depends on the price of the software. If the unit cost of the software is $250,000 you have a big winner on your hands.

How about lead generation? What if your mailing costs $25,000 and generates just 10 leads? Is it a success or a failure? That means each lead cost you $2,500. Is that good or bad? Let’s say that you know your close rate on qualified leads is 20%. That means you should end up selling 2 units (at $250,000 a piece). That’s a pretty good return on investment.

The numbers above are completely made up. The point, however, is that you can’t just look at one thing to determine if your mailing is successful or not. It depends on what a lead is worth—and what you’re trying to accomplish. What’s important is that you have all of your factors in place (cost, revenue, value of leads) so that you can accurately measure whether your mailing is a success of not. And just because an initial result doesn’t yield the dollars you’re shooting for, that doesn’t necessarily mean your mailing wasn’t successful.

Direct Mail Best Practices