Direct Marketing Metrics to Watch

When executing a direct mail marketing campaign you need to know if you’re getting a good return on your investment. Collecting and ROI of Direct Mailanalyzing your detailed direct mail marketing data allows you to see what’s working, track ROI, identify areas in your campaign that need improvement and make your next mail-out that much more effective.

Direct Marketing Metrics to Watch

Keep an eye on these 12 direct mail metrics to make every new mail campaign more effective than the last:

Response Rate: The response rate refers to how many people respond to your direct mail-out. On average this rate usually runs between 1 – 3% with exceptions depending on the product/service being sold.

Cost Per Response: Charting cost per response helps you compare the costs of two separate direct mail campaigns, or comparing a direct mail campaign with other marketing vehicles.

Response Potential: Once you have some sales, those that respond are grouped into a new category with a higher response potential. Repeat business is a much easier sell than attracting new customers.

Qualified Response Rate: Not all direct mail responders will be dedicated to making a purchase. A 2% response rate on 10,000 mail-outs creates the opportunity to make 200 sales. If only half that number has real interest in your product/service then your qualified response rate is 1% or 100 leads.

Conversion Rate: After acquiring qualified response you’ll want to know how many of those “hot leads” went on to make a purchase. Tracking all these metrics in order allows you to identify areas of your sales funnel that can be improved to increase sales and repeat business.

Renewal Rate: Mailers can be geared specifically towards renewals, for things like memberships or product upgrades. This metric charts how many existing customers you retained with a direct mail campaign.

Cost Per Lead: Dividing your campaign costs by the number of total leads from a campaign gives you your cost per lead. Similarly to cost per response, cost per lead lets you compare one direct mail campaign over another or against other print/online campaigns.

Order Rate: This metric is straightforward, telling you what percentage of people bought your product or service. However, long sales cycles can skew this measurement.

Customer Acquisition Cost: This cost measurement summarizes all related costs used to acquire a new customer.

Revenue Per Order: Revenue per order shows you the amount of money your campaign generated on a per-order basis, allowing you to both see who ordered higher quantities and create revenue per customer averages.

Expense-to-Revenue Ratio: While ROI can include non-monetary gains such as branding, your expense-to-revenue ratio measures how much you spent on a campaign vs. how much revenue you brought in.

Lifetime Value: Some customers will buy again and again. Tracking this data allows you to determine the value of a customer in the long-term and lifetime averages for all customers.

Keep measuring all of the metrics listed above to improve your sales processes and increase your revenue.