Using Past Data to Improve Your Direct Mail ROI

19 May 2020 / By Mike Gunderson
Using Past Data to Improve Your Direct Mail ROI on gundersondirect.com
Reading time: 3 minutes

The data you collect from past campaign results can provide valuable insights and help you adjust your strategy.

Every piece of direct mail that you send tells you something about your strategy, both good and bad. This information is precious — it provides insight into what customers think of your marketing and what will be most successful in future campaigns.

When applied over an entire campaign, those little insights show what’s working and what isn’t, allowing you to make adjustments and improve future ROI.

Start collecting data from previous campaigns before you even start A/B testing because it’ll show what you should test. From there, you can see where you’re going wrong and make the necessary adjustments.

Here are three aspects of your past data to analyze before taking the next step toward reaching your marketing goals.

 

1. Cost per acquisition

Start by looking at your current cost per customer acquired because that shows if your existing direct mail strategy can benefit from adjusting. This is how much it costs you to acquire a new customer and can generally be derived by dividing the cost of your acquisition campaigns by the number of new customers they converted. The higher the number, the more purchases customers must make over their lifetimes to generate a profit.

If the cost per acquisition is too high, that shows that what you’re doing isn’t working as well as it needs to for your campaigns to generate adequate ROI. You ‘ll want to make some changes to your message and whom you’re targeting.

Once you make those changes, mail fewer pieces to a highly targeted list to start, as this will improve your response rates and, in many cases, increase ROI.

 

2. Response rates

Next, look at your response rates to see how they’re performing. If your response rate is below your industry’s average, and you don’t have a good strategic reason for that to be the case, it’s time to make changes.

Many times, a reduced direct mail response rate is the result of your offer, since consumers will usually respond to something that benefits them.

There’s a chance that your discount isn’t large enough to motivate customers to take the next step, or that customers don’t understand your product and how it benefits them. In these situations, adjusting your pricing or the offer package, if possible, can get those prospects to respond.

Your CTA could also limit your response rates if consumers aren’t sure what they should do and how they should do it. Make sure your call to action is clear and easy to follow for best results.

 

3. Conversions

Not every campaign leads directly to a sale, make direct mail campaigns are aimed at generating leads that your sales team will nurture into sales. Looking at how well your responses are converting into sales will tell you a lot about the clarity of communication from mailpiece to sales call.

Compare your response rates to your conversions to see if there is a significant gap you want to address. Likely, your offer wasn’t enticing enough for consumers to go through with the purchase, but the good news is that they’re responding, so they’re interested in your product.

You can fix this issue by changing your offer, or even altering the wording to make it time-sensitive. The goal is to convince a customer to take final action, so make your offer incredibly appealing in your next round of advertising.

 

Applying what you learn

As you accumulate this data, you’ll learn a lot about what your current direct mail list thinks of your advertising material. Once you’ve collected a significant amount of performance data, you’ll know where your direct mail marketing is working, and where it needs improvement.

From there, you can start A/B testing by altering the sections of your material to see which new presentations work better. The result will be a more successful direct mail campaign where you reach interested consumers with a message that appeals to them and encourages action.

Gunderson Direct is a full-service direct mail agency that can assist with every aspect of your campaign. Our team can help you to analyze your data, ensuring that you pull the right conclusions from it, and improve your overall ROI. Please stop by our contact page and drop us a line to learn more about our direct mail services.

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About The Author

Mike Gunderson

Mike Gunderson is the founder of Gunderson Direct, Inc., a direct marketing agency that helps businesses drive new leads and close more sales through traditional offline channels, especially direct mail.