About 87 percent of small business owners say print marketing drives customers to their locations, according to the U.S. Postal Service (USPS) Certified Direct Mail Professional (CDMP) program. The USPS arrived at their conclusion by citing the ease of ability that direct mail offers to track and measure campaign results. Tracking and measuring provides valuable insight into what worked and didn’t work within the program and is invaluable for planning future strategies.
Direct mail is the easiest of the various marketing channels to track. When companies purchase television advertisements—for millions of dollars—they’re unable to directly ascertain if these brought consumers to stores or websites. Sure, they can check the traffic analytics to see if there was an uptick in visitors during the time the ad played, but it’s impossible to know for sure if it was definitively the driving force. Direct mail can also help you figure out which variable motivated the recipient as long as you have a tracking element in place.
Similarly, it’s difficult to trace a sale or reply back to print advertisements in newspapers or magazines. Unless your customer service representatives ask every person who calls in or enters a store how they found out about the company or product, you’ll never be able to quantify how many consumers were motivated by the ad. It’s unlikely every rep will ask, so the numbers will never be accurate.
So, how do you track your direct mail campaign? Add identifying tracking information to each mail piece. This can include:
Intelligent Mail Barcode (IMb)
This 65-bar U.S. Postal Service barcode is a tool that can be used to sort and track outbound letters and flats to give you an idea of its deliverability or more simply, the “in-home” window. It consists of a 20-digit tracking code, which contains identifiers and serial numbers, and an 11-digit routing code, including the zip code of the recipient. Additionally, it ensures the USPS can identify your package.
You can track a reply card to find out how many responses are passing through your postage account (if you are paying for return postage) when they are on the way back. For example, when political surveys are sent out with response cards, candidates’ teams can trace the number of replies they’ll receive as they’re processed through the USPS system. This can be a critical piece of information in order to staff properly at fulfillment for incoming mail.
The overwhelming advantage of an IMb is knowing the “in-home” window. This enables you to facilitate a higher response and use the following tracking information to better prepare for the customer's response.
Some companies have become interested in printing business reply envelopes and response cards without an IMb. Instead, they opt to have Design Distributors add a unique barcode with our inkjet printers for split or mailing panels, enabling instant performance measurement. This way, you can track your mail pieces online as soon as they’re processed by mail carriers.
Trackable Phone Number
When creating your direct mail, whether it be a postcard or letter package, include a trackable phone number. By setting up a dedicated phone number that forwards to your business line, you can track conversions through those specific digits. With most services, you can choose from either a local number or a toll-free 1-800 number.
For example, if you’re a local business in New York City sending out brochures about additional services you offer, you may want to set up a traceable 718- phone number to target the local consumer.
By knowing when to expect the mailer to reach homes, you can activate the number based on the “in-home” window, managing costs and ensuring sufficient phone service for your responders.
Your mailer should also have a trackable URL that leads clients to a custom landing page on your website. You’ll be able to look at your site’s traffic analytics tools to see how many people visited the page. If you A/B test postcards, you can use two different URLs and landing pages to demonstrate which was more successful in persuading customers.
For instance, say you own a clothing store chain called Crystal’s Clothing Store and you’re having an annual end-of-year sale, so you decide to send out postcards containing a trackable URL. If your website is www.crystalsclothingcloset.org, your landing page URL should be www.crystalsclothingcloset.org/annual-sale.
Personalized URL (PURL)
A PURL, which takes customers to a landing page with content customized just for them, can be created for each person on your mailing list. Using the example above, a PURL may appear as www.crystalsclothingcloset.org/Jane-Smith. These PURLs can be powerful tools. Response rates for direct mail with PURLs are about 5 percent in comparison with the industry average of 2 to 3 percent.
You can also send emails and other digital means around the “in-home” window to show the recipient an image of the PURL or URL they will see. Recency and familiarity tend to increase response.
Design your mail piece with a unique coupon code your customers can redeem in store, online, or by phone. If you put multiple codes on one mailer, you can test which will have the greatest success.
For example, Crystal’s Clothing Closet may send out a postcard with two coupons, one offering “30% Off One Item” and the other “Buy One Item, Get One 50% Off.” If the stores receive more of the “30% Off One Item” coupon, you’ll know this offer is more appealing to customers for future campaigns.
This method can also be applied to test which products interest clients most, and give marketers an insight into who is purchasing which type of goods. For instance, Crystal’s Clothing Closet could send out a postcard with four coupons on it, one promoting 15% off sweaters, $10 off slippers, 20% off jeans, and $15 off sweatpants. Marketers can track the used coupons codes, compare them back to the mailing list and find similarities, such as age, gender and geography, among the purchasers. After comparing the data, it may appear most of the customers who used the jeans coupon were male between the ages of 20 and 35, so marketers can tailor their strategies for jeans to that demographic.
Make it simple for your customers to reach the unique landing page by adding a QR code, a barcode that’s read by a smartphone, to the mailer. Once a receiver scans it with their camera, they’re directed to the special landing page. You’ll be able to use your website’s traffic analytics to see how many people visited or took an action on the page.
You can even customize the shape of your QR code to make it stand out!
Once you’ve added all the tracking information you’d like to include and acquired the data, you’ll have to start measuring.
This step goes back to your SMART goals. Your objectives, such as boosting sales or increasing brand awareness, will determine the way you measure the campaign.
This also goes back to the “in-home” windows. You can use this information and this combination of tools to accurately staff your call centers and stores, resulting in lower costs and higher customer satisfaction. All of this can be used to increase response rates in the future.
The metrics used to detect if your campaign is reaching its goals and determine future success include:
The response rate is the simplest way to measure the success of your plan. The more feedback you receive, the higher the odds of conversion. It’s generally the measurement for companies looking to increase brand awareness.
The response rate is the percent of people who responded to the mailer, and is calculated by dividing the number of responses by the number of pieces sent, and then multiplied by 100.
According to the trade group Data & Marketing Association (DMA)—formerly the Direct Marketing Association, the average response rate is 9 percent for house lists and 5 percent for prospect lists. This number can vary by product price: If the promoted product is more expensive, there will most likely be a lower rate compared to cheaper products, according to the aforementioned CDMP.
Qualified Response Rates
This metric measures the number of responders interested in following through with the offer, and should be used to check if sales goals were achieved. It’s calculated by dividing the responders who are serious about your offer by the number of direct mail pieces you sent out, and multiplied by 100.
For instance, if you send out 150,000 pieces of direct mail and receive 5,000 replies, your response rate is about 3.3 percent. When you follow up with those who responded, you may find 2,000 are actually interested in purchasing your product or service, leaving your qualified response rate at approximately 1.3 percent.
Cost per Analysis
You can calculate the cost per response, cost per qualified response, and cost per sale to plan your next campaign, or compare it to other forms of advertising you’ve used. Each is calculated as follows:
Cost per Response
Total Cost Spent on the Direct Mail Campaign / Response Total = Cost per Response
Cost per Qualified Response
Total Cost Spent on the Direct Mail Campaign / Qualified Response Total = Cost per Qualified Response
Cost per Sale
Total Cost Spent on the Direct Mail Campaign / Sales Influenced by the Campaign = Cost per Sale
If your push is sales goal oriented, you’ll want to find the number of prospects in your campaign who purchased your offer. This is calculated by adding the previous inventory and current merchandise together to establish the total inventory. Then, divide the units sold by the total inventory, and multiply that number by 100.
Cost to Acquire a Customer
To determine the cost to acquire a new customer, marketers must add the total cost of sales and marketing, and divide that number by the new customers acquired. This statistic is used to indicate profitability, and can be helpful to figure out if sales objectives have been met.
Return on Investment
Return on investment (ROI) is possibly the most important metric, because it can show whether your company gained or lost money on a specific venture. This is the total revenue divided by the total cost. According to CDMP, if you have a negative ROI in the short term, it could be good if your customers buy from you over a long period of time. The lifetime value of your customers may be higher than a single campaign’s ROI.
Customer lifetime value estimates the total revenue your business can expect from a single customer. To find your lifetime customers, you’ll need to track customer purchases over several years.
Then, you’ll need to find the average purchase value and multiply that number by the average purchase frequency rate to determine customer value. Calculate the average customer lifespan and multiply that by customer value to come to the customer lifetime value.
If the final cost to acquire a customer is more than the customer lifetime value, you’ll need to adjust the methods you take and the amount you spend on obtaining that customer.
Design Distributors can make the tracking and measurement process simpler by creating database management solutions for your company. DDI has the ability to develop custom programming, enabling our clients to track a multitude of data points or create a sales table.
We have a USPS location on-site, ensuring all mail can contain an IMb, so you’re able to follow your mail to its recipient and the return card back to your company. Plus, we’ve been developing direct mail campaigns for more than 50 years, so we know all the tips and tricks to guarantee your efforts are prosperous.