What’s What in Direct Mail ROI
Direct mail is a force in marketing, even in today’s digital economy. (Hint: we’ve written a lot about direct mail marketing’s impact ourselves.) Direct mail certainly has a lot of potential when it’s done right, especially when supported by direct mail apps.
The potential reach of direct mail is enormous on its own. Households with a $150,000 receive on average 65 pieces of mail each week, and on average respond to 2.2 of them. According to the DMA, the average response rate to for direct mail marketing was 4.4%. With 65% of consumers reporting that they’ve made a purchase as a result of direct mail, it’s no surprise that businesses are still on board with amplifying marketing with direct mail marketing initiatives.
Addressing and measuring Return On Investment (ROI) for direct mail is pretty simple. It does require though that you think of the outcomes of your campaign in a specific way. Response rate, and customers acquired, is a great way to gauge campaign effectiveness. Remember though that there is a big difference between quantity of responses and the quality of responses. Marketers should emphasize response quality when measuring direct mail ROI, versus focusing solely on monetary gains. Consider this: if you spend $1,000 to reach several thousand targets, you may only need a few responses and conversions to break even on your campaign. And with an average response rate of 1-5%, it won’t take long for your direct mail campaign to pay off.
You might guess that cost-per-acquisition for direct mail marketing is on the high endtoo, given all the physical elements required to carry out a campaign. But it’s actually surprisingly competitive to its digital counterparts. Take a look:
Calculating direct mail’s monetary return
Calculating your own ROI is easy. Just divide the results (typically revenue) by the investment (marketing spend). If you’re feeling lazy about doing the math, there are plenty of ROI-specific calculators out there, too.
It’s simple to get a handle on your direct mail ROI before the first postcards even go out. Consider the cost of printing, mailing, and developing the campaign first. If you spend $7,000 to develop your campaign–the human brainpower behind the ideas– another $3,000 to print, and then $3,000 to mail everything out, your total cost would reach $12,000. If your product or service sells for $100, about 120 people (a return of 2%) need to respond for your campaign to break even.
Using a direct mailing app can cut these costs. Direct mailing apps bundle design, printing, and list-building (or some variation of the three) onto one platform. Businesses can cut their costs in a big way instead of paying for each individually.
How to maximize return with direct mail apps
There are a huge number of direct mail platforms out there that can help you simplify and save on direct mail marketing. Our guide to real estate direct mail marketing is a handy place to start.
With the hard stuff covered (like printing logistics and design), you can focus your attention on what really matters: the creative development of your direct mail campaign. Putting in the work on targeting and creative increases your both your response and conversion rates. With content tailored to your audience, you increase your chances of response by at least 29%.
A number of direct mail apps also have built-in QR codes and customized landing pages that make tracking and campaign measurement a cinch.
With the right frame of mind–and perhaps support from a direct mail app–optimizing your direct mail campaign’s ROI is easy. You’ll break even (and beyond) on your marketing initiatives in no time.