Tag Archive for return on investment

Direct Mail and Marketing Response Numbers

We have shared many statistics the past year about response numbers. We think we should review some of them.

More than 70% of Gen Yers (born 1977-1994) and Gen Xers (born 1965-1976) sort their mail immediately.

76% of internet users were directly influenced to buy an item or service thanks to direct mail.

78% of email recipients do not open the message, so that means that 94.1% of email recipients are not clicking through to your landing page.

55% of survey respondents cannot effectively measure marketing ROI of mobile, social media and video.

65% of companies had not increased revenue or profited using social media.

79% of all households read or scan the advertising mail sent to their home.

More WOW! Numbers

55 Percent of Survey Respondents Cannot Effectively Measure Marketing ROI of Mobile, Social Media and Video,” this is the recent context of press release from Omniture. Omniture perceives this as an opportunity.

We reported on the results from a different study from R2integrated that found that 65% of companies had not increased revenue or profited using social media.

Is this really opportunity, or this an opportunity to reevaluate the great hope that new media would be the key to increased revenue?

Let us help you explore if a direct mailing campaign will help you grow your revenue.

Wow Numbers Mean Direct Mail Success

As a follow up to our post about “WOW” numbers:

According to the USPS Household Diary Study, 79% of all households read or scan the advertising mail sent to their home.

ATG’s Cross-Channel Commerce: The Consumer View report found that 78% of consumers are using multiple channels to research, shop, and ultimately complete purchases. Consumers browse and research online, then make the purchase in the store–39% went to the store to touch/feel the products; 36% visited the store to compare brands; 22% visited the store because they needed the product immediately

76% of Internet users said they were directly influenced by direct mail; 67% were influenced by TV; and 58% of email users were influenced according to Exact Target’s Channel Preference Study. Additionally, 75% of 25-34 year-olds have made a purchase as a result of direct mail and 62% of 18-24 year olds purchased due to direct mail.

R2integrated, an integrated marketing and technology company found that 65% of companies had not increased revenue or profited using social media.

Public Television stations have reversed their decline in acquiring new donors through direct mail campaigns. DMW Direct analyzed 700 campaigns representing 34 million pieces mailed and found that $295.32 was raised per thousand pieces mailed in 2009, up 16.3% from 2008 and the average gift was $42.10 up from $41.64.

The Future of Marketing?

Is it really the economy, or is the recovery sluggish because people are not being reached when they want to consider marketing messages?

In a post that appeared on a Harvard Business Review blog, Dick Patton suggested that the four P’s of the traditional marketing mix (product, price, placement and promotion) be replaced. His article suggests a new acrostic: ROIDs

  • Responsibility marketing, including social responsibility, green marketing, and sustainability
  • Organizational leadership, requiring marketing to touch as much of the value chain as possible
  • Insights about customers, based on new analytic techniques that replace yesterday’s market research
  • Digital marketing, requiring companies to master an amorphous bundle of fast-changing media

What about the four D’s?

  • Dependability, as in marketing that is accountable, conscientious and responsible
  • Direction, marketing should be an integral part of determining where the company goes
  • Discernment, understanding of customers and the environment
  • Digital, companies must harness the power of ever-changing media, but be careful not to give it more influence than it deserves

Direct marketing needs to stay an integral part of this future; even as the environment, the rules, the models and what is really working and yielding results and returns on investment keep changing. Many businesses in many sectors have put more and more resources toward marketing using new technology, but the profits and revenue have not been created.

We need to talk to people when they want to receive information, not when they are in the middle of trying to just get through 50 emails or when they are gathering information for what they are ready to buy right now.

Direct Marketing Math

Direct mail and direct marketing are all about results and return. Hopefully finding all these formulas in one place is helpful.

Response Percent                     =          (responses / mail quantity)  X 100

Raw Cost Per Response          =          cost per package / response rate

Break Even Response Rate    =          cost per package / cost per response

Average Order                           =          sales dollars / number of orders

Loaded Cost Per Response    =          (cost per package / response rate)  +  fulfillment  +  telemarketing

Profit per Buyer                          =          profit dollars / number of buyers

Marketing Cost Per Order        =          marketing cost / number of orders

Load Cost Per Sale                  =          cost per lead / closing rate

Maximum Package Cost         =          cost per response  X  response rate

Ideas to Stretch Your Mailing Dollars

Creating and producing direct mail advertising can get very expensive. But that does not mean you have to spend a fortune. You just need to know how to make the most of your dollars.

Mail to your best prospects or customers first.

Don’t drop huge quantities all at once. If you are mailing 50 letters to sell more to your best customers, 250 cards to convert first-time buyers to repeat buyers, or thousands of pieces to find qualified prospects, it’s all direct mail, it is measurable and accountable.

Maximize your return. Whenever you invest in postage to communicate with your customers, increase your yield on that investment by also asking for referrals, offering an incentive for new product ideas, direct them to a special page on your website or give them a “Yes or No” option to respond (Yes, I’m ready to buy now … No, I’m not ready now but I do want to stay informed about new products and services).

“Pass-along”. Increase your total exposure without increasing your costs. Ask the recipient to give your mail piece to an interested friend or co-worker. Make sure to provide some kind of a “thank you” for doing it and create a way to track this response too.

Make the postage stand out. Use a different looking stamp or indicia to gain reader interest and attention.

Stretch your budget. Use a more expensive printed mailing piece to your best customers or prospects and less expensive postcards to your secondary targets.

Effective direct mail does not have to cost a fortune.

Why Is Direct Mail Effective?

Few other selling tools deliver your message with exact precision and impact. The amount of mail in your mailbox everyday attests to the success of this medium (If it didn’t work, your mailbox would be empty!).

Mail works when you’re not. Regardless of what you’re doing, working or playing your direct mail is talking for you. It gives your best presentation without you being there.

Mail multiplies your efforts. Send out thousands of postcards or letters and your best sales pitch is being presented to thousands of people simultaneously.

Mail allows you to aim with accuracy. Direct mail allows you to pinpoint the people who fit your profile, with as much or as little detail as you want.

Mail makes it easy to track your return on investment. With direct mail marketing you can code your mail pieces to determine the exact number of responses you received from each campaign.

Mail is relatively inexpensive. It is amazing what you can get into a small business size envelope and keep under the one ounce limit. Or you can use a jumbo size postcard and tell your story beautifully.

Mail gets one-on-one attention. One of the best things about direct mail is that it gets one-on-one attention from your target prospect. Direct mail is opened one piece at a time and read one piece at a time.

Mail gets delivered. There are no high tech filters on physical mailboxes. Your recipient will see your name and decide what to do with your message.

Mail is something you can touch and feel—it hangs around. Direct mail is something that you can hold in your hand. It is physical. It is something that can hang around for a period of time. It has “lingering” marketing effects.