So you just sent out 20,000 pieces of mail to potential customers and received a subpar response rate in return. What do you do next? How do you improve? How does one recognize specific areas of failure, or areas of success for that matter? Well, it probably has something to do with all of these numbers you’ve farmed over the last few months! Analyzing your data is critical for understanding whether your dollars are being spent for the right reasons and in the right places. Below, we’ve listed some important aspects of data analysis to consider for your direct marketing campaigns:
Calculate your costs
Just like any aspect of business that involves expenses, direct mail costs include both fixed and variable costs. Fixed costs refers to any expenditures that generally remain the same regardless of your production output, such as creative development, consultation fees, or other one-time costs associated with your direct mail campaign. Variable costs -- like the term implies -- will change depending on the size of your mailing list. These costs will include postage, envelopes, inserts, cover letters, and other items that need to be created in volumes proportional to the size of your reach. Your total investment is the sum of your variable costs plus fixed costs.
Note that one of the most logical ways to increase your return on investment is to reduce costs. If you’re struggling to improve your response rates or generate larger sales, cutting back on fixed or variable costs can help you save money, which can raise your gross margin.
Build a financial model that focuses on ROI
It is absolutely vital that you take the time to fully understand your sales process and know which numbers and metrics correlate with success. Only after you truly comprehend the numbers can you craft the most efficient lead generation campaign. Lead generation processes should begin with a comprehensive analysis of the data and success metrics for the direct mail campaign.
Response rate is important, but don’t forget about response quality
You’ll probably hear that your direct mail efforts should yield an average response rate somewhere around two percent. Consider, however, that your in-house mailing lists -- which consist of your absolute best customers -- should generate response rates much higher than two percent. This two percent average rate generally applies to direct mail campaigns that make use of outside mailing lists and offer a service or product for free.
Then, you should consider that responses don’t mean much if you can’t convert those responses into customers. Track the quality of your responses (closely related if not identical to the conversion rate) to analyze which leads can be nurtured into a sale, and which leads might not be worth the effort.
Adapt and polish your processes constantly
Your marketing campaigns will never be perfect, but you should always be headed in a positive direction. Analyze your results each quarter (or more frequently if you desire) and compare them to your periodical goals. Discuss changes to your ongoing marketing plans based on data you’ve collected. Constantly question whether your efforts align properly with your long-term goals, and adapt to any issues that might pose as obstacles on your way to your objectives.
Need help crunching some numbers? MEDiAHEAD offers everything you need to fully communicate and measure the impact of your message over print, online, and other new media outlets. Contact MEDiAHEAD todayfor more information about developing an integrated direct mail campaign!