Measuring the Success of Your Direct Mail Campaign: What’s a Good ROI?

Nov 9, 2019 | Blog, Mail & Print

As a marketing channel, direct mail delivers big benefits. It is cost-effective, can be highly targeted, is easily tracked and helps to boost overall brand awareness.  

And if you think that direct mail has gone the way of the dinosaur, think again. Yes, it’s a digital world out there, but direct mail is still an incredibly effective way to connect directly with your target audience. As a matter of fact, response rates for direct mail have increased in recent years and are running circles around digital channels!

According to the Direct Marketing Association’s 2018 Response Rate Report, direct mail to an existing customer list delivered a 9% response rate and 5% response for a prospect list. Compare that to a 1% response rate for an existing customer email list and 1% for a prospect email list.

Why the uptick in direct mail responses? Marketers are getting smarter about leveraging technology to finely tune their audience, taking full advantage of customization options and using direct mail strategically as part of their overall integrated campaigns.

So, What’s a Good Direct Mail Return on Investment?

Along with response rates, Return on Investment (ROI) for direct mail has improved in recent years due to improved direct mail software, list data, and printing technology.

Based on 2018 data from marketingcharts.com, direct mail has a median ROI of 29%. This data puts direct mail in third place behind email and social media ROI. However, social media is only one percentage point higher at 30% ROI. 29% may not seem like an attractive number, but when you take into consideration that paid search and online display ads come in at 23% and 16%, it helps to put things in perspective!

Determining YOUR Return on Investment (ROI)

ROI is tricky because there are a lot of factors to consider and the rate of return will vary for each campaign. Before you can determine what kind of ROI to expect, you’ll need a firm grasp of your costs. You’ll also need to know exactly how you are tracking your responses and do it consistently.

With the right data, you can easily determine a campaign’s ROI using this handy calculator from the USPS.

Maximize your ROI

Once you begin tracking campaign ROI, you can continue to refine various elements and keep results going in the right direction. Test different content, images and calls to action. Find what works for your audience, fine-tune as needed and boost performance!

Here are some helpful tips that can make an impact on your direct mail ROI:

  • Results show that letter-sized direct mail performed best for lead generation with a 15.1% response rate
  • Be sure to have a solid methodology in place for measuring response rates – the most popular methods include online tracking, codes or coupons, and phone calls.
  • Personalization and customized offers boost response rates. According to a 2017 study, adding a name to the marketing message boosted response rates by 135%!
  • Direct mail used in combination with digital ads yields a 28% higher conversion rate.
  • Using direct mail as part of a multi-channel approach has been proven to deliver 118% higher response rates than campaigns that only used direct mail.

Key Takeaway

Each medium has its own advantages. You can maximize your marketing efforts when you combine the strengths of direct mail with other channels.

It can take 18-20 touchpoints to cut through the clutter and reach your customers for the first time.  Understand your customers and potential customers, learn where to find them and then develop a variety of touchpoints with customized offers that speak directly to their needs.

Higher Information Group has the knowledge & equipment to save you time and money on your direct mail campaigns! If you’re considering making direct mail part of your integrated marketing, contact the experts at HIG. We can help you design & execute multi-channel data-driven campaigns that deliver results!

 

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