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Key Takeaways:

  • Setting KPIs that are overly dependent on conversion as a measure of success could hurt your ability to find good prospects over time.
  • Lead-gen programs are often wrongly faulted for having flaws and a customer experience that turns off qualified leads.
  • There are concrete steps marketers can take to build.

Listen To This Article: Could Your KPIs Be Hurting Your Business
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I’ve been fighting a KPI (key performance indicator) battle recently.

Setting appropriate KPIs is an essential part of setting up any marketing program. If the KPIs you use to judge success are off base, you’ll misjudge your program’s effectiveness and stymie your ability to improve it.

Lately, there is no such thing as a lead-gen program. The terms “response” and “conversion” are being used interchangeably. Channels and tactics that used to be credited for bringing in leads are now judged as if they were bottom-of-the-funnel conversion programs. This is myopic thinking that may sound good in a boardroom presentation but hurts your prospecting efforts in the long run.

We are a direct mail (DM) agency that develops lead-generation programs for companies of all types. Even in cases where we agree to lead-focused KPIs upfront, we are often held responsible for conversion tactics we have no control over.

Often it’s due to flaws in the sales funnel — poor landing pages, unprepared salespeople, broken promises, and a host of other scenarios that cause a good prospect to give up and move on.

Beyond those obvious issues, two pitfalls of the conversion-only KPI approach specific to DM lead-gen program success are below.

Pitfall #1: Once a prospect responds to a mail campaign and becomes a qualified DM lead, your funnel needs to accommodate the dynamics of DM response.

  • The DM conversion journey almost always requires moving a prospect from a physical to a digital environment. You could inadvertently be making it difficult for mail responders to buy compared to those who can click on a link. QR codes and vanity URLs can help reduce that friction.
  • Related to the above, don’t send prospects to a landing page that was designed for a different channel and is thus out of context with the DM in terms of design, benefits, offers, or social proof.
  • If there’s a phone number in your DM creative, the people who call are generally excellent prospects. Are the phones adequately manned for responses? Are we delivering potential leads to phone-tree/voicemail purgatory? And is tracking in place to attribute calls to the mailing?
  • Response analysis time frames can be shorter than conversion time frames. One of DM’s strengths is generating leads for expensive, high-consideration products and services with longer conversion cycles. Are you trading fast analysis for accurate analysis?
  • Finally, and importantly, are you attributing responses fairly to mailings? As noted above, responders from your mail program typically have to go online to take advantage of your offer. Many will just type in a company URL or click on a recent email. Is the digital team or an internal sales team taking credit for DM leads?

Can you add to that list? By focusing KPIs on conversion without valuing quality leads, you run the risk of overlooking what might be real obstacles to DM (and overall) conversion.

Pitfall #2: A narrow, conversion-only KPI focus compromises prospect targeting strategies.

It’s common for conversion-focused marketers to develop a prospect model based just on existing customer files rather than a mix of customers and prospects. Here are three issues with that thinking:

  1. Customer files may not be large enough or diverse enough to result in a high-performing DM prospect model.
  2. Even if the customer base is large enough in total, it could be flawed in other ways that make it less than ideal to use as a basis for DM prospecting. For example — if your business is new to DM then we’re building a DM prospecting model that’s based on digital responders who became customers — and they could be pretty different from potential DM responders.
  3. Basing prospect data on customer files implicitly sets an expectation among managers that the KPI should be a final sale; again, that’s asking a lot from a piece of mail.

In summary, DM prospects are different from other prospects in kind and in the process they go through to respond. DM responders are easy to track because address-based data is extremely accurate. But, don’t wait until the final step in a sale to track and report on DM prospecting results.

So, what’s a growth marketer to do?

Let’s first recognize that, while the end goal is a sale, prospecting, by definition, is a top-of-funnel activity. Here are some practices we apply to our clients’ prospecting efforts:

  • From the outset, best practice is to build a prospecting model using a mix of company customer data and leads data. This accounts for the value of a good lead, not just a final conversion, when selecting prospects for a mailing.
  • For reporting purposes, you need to know what response behavior indicates a quality lead so you can set KPIs that allow you to analyze prospect responses for optimization.
  • Analyze and profile qualified leads from the DM program to help fine-tune targeting and/or add insights into their behavior that can lead to better messaging and offers.
  • Consider setting KPIs for each stage of the funnel, or even a combined lead+conversion blended KPI measure using fractional attribution.
  • One approach is to create a measure that scores responders based on the steps they take down the funnel to identify prospect quality based on their behavior even if they don’t convert.
  • Build DM marketing programs that focus on bringing in good leads and enhance the prospect’s DM sales journey all the way through the funnel. That means aligning data, messaging, offer, and CTAs from top to bottom.
  • Analyze cross-channel engagement metrics to determine the overall lift DM provides as part of a multi-channel strategy. One client reported a 40% lift in organic search after a mailing (and credited the mailing for that lift).

In closing, get creative; KPIs are not one-size-fits-all! And keep in mind that constantly improving your ability to find great prospects is critical. Build tests and set KPIs that help you learn how, why, and where your leads funnel can improve instead of just giving a pass/fail grade to your efforts.

What’s been your KPI-setting experience lately? Too much conversion emphasis? Not enough? Just right? Let me know what you think.

And reach out if we can help you build and execute a DM program.

Gunderson Direct has long-lasting relationships with some of the country’s largest corporations, helping them to lower their customer acquisition costs and increase profits using address-based integrated direct marketing programs.

Drop us a line for more information on how our direct marketing expertise can help your business.

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Jeff has been with Gunderson Direct since 2017 and has played a significant role in the growth of the agency’s client base while helping to manage growth across agency departments.