Congratulations—you’ve decided to embark on a direct mail marketing campaign. Since it’s a tried-and-true method for increasing brand awareness and attracting new customers, you know it could be a boon for your business. 

With the many benefits of direct mail marketing, how do you get the most return on your marketing efforts? Besides learning how to run a direct mail campaign, you need to know how to measure direct mail effectiveness.

This guide will go over the metrics that can help you determine how to measure direct mail success. Because each campaign will have its own set of goals, it’s important to familiarize yourself with the metrics that are most helpful for you.

Measurable Tracking Methods

After learning how to write direct mail copy and sending out your direct mail campaign, you aren’t going to be able to go door-to-door and survey people about how effective your campaign was. Instead, you need to set up tracking methods that you can easily measure and analyze. These tracking methods will allow you to see how many people are engaging with your mailing. 

Typically, there are two types of tracking methods: front end and back end. 

Front End Tracking

There are a number of different tracking methods, and as technology changes, the methods we use may change with it. Front end tracking is generated with the intention of generating an easy up-front way to measure a new customer acquisition or sale. Today, some of the most popular front end methods are:

• Promo code or coupon – Tying a specific promo code to your direct mail campaign allows you to track individual purchases and link them back to your campaign. Just be wary, as people could forget to use the code or find things outside of your promo that they’re interested in, so your campaign may be more effective than this metric makes it seem.
  

• Custom URLs – Increasing website traffic is a smart goal for your direct mail campaign. However, if you just put your website on your direct mail piece, how will you know who came because of the mailer and who found it through other means? By creating a custom URL exclusively for your direct mail campaign, you create a metric you can use to see how effective your campaign is at directing people to your site.
  
• QR codes – Similar to custom URLs, by creating a QR code unique to your campaign, you can measure how many people use the code to gain access to your site.
  
• Telephone number – We’ve touched on metrics using the internet and snail mail, so how about using the phone? Setting up a unique number tied to your campaign where people can call for more information creates an easy-to-monitor metric.
  

Front end tracking gives you an initial idea of campaign performance and can give you insight into when a customer first interacts with your business. The metrics of front end tracking are simple and applicable. However, compared to back end tracking, front end methods are less comprehensive. In other words, front end tracking does not capture all conversions from a campaign, as many respondents might just come directly to your site despite your specific CTA.  Also, your unique promo code or URL might end up posted on the internet and being used by people who never received a mailer in the first place.

Alone, front end tracking is still valuable, but it won’t provide you with the full picture needed to gauge the efficacy of your company or direct mail marketing campaign. For that, you’ll need back end tracking. 

Back End Tracking

While front end tracking can give you a quick read on the performance of your campaign, back end tracking gives you the most accurate 1:1 read on true performance, linking individual conversion events to specific mailers, and allowing you to clearly understand the value your campaigns are driving.  Front end tracking, while easy to measure and quicker in terms of getting initial numbers, lacks this level of accuracy as it can miss a large portion of conversions driven by the campaign that may not have used the intended CTA. 

Through this back end analysis you’ll get the clearest picture of performance, using the following matchback analysis.

With a matchback analysis you can measure the success of your direct mail campaign’s performance. Direct mail matchback is a process in which sales or orders are “matched back,” typically using a mailing address, to your mail campaign file and indicating a level of credit for the sale. In essence, it allows you to see consumers who received your mailer and then took an action, even if they didn’t use the specific CTA on the mailer.  The match will also indicate which mailer variation it came from (if you were running A/B tests), which helps to provide a comprehensive look into the campaign’s effectiveness and insight into how the campaign can be optimized moving forward. Only a small percentage of data will come in through front end tracking like URLs or promo codes, especially if the direct mail is not unique to your specific offer or can be found elsewhere on your company site, making it difficult to track which channel the used offer came from. Matchback analysis makes up for this difference by linking a sales file to a mail file for more accurate tracking.

Additional Strategies

• CVR benchmarks – CVR, or conversion rate, indicates what percentage of people saw your direct mail and then took action, whether that’s visiting your website or using your promo code to make a purchase. A high conversion rate might mean your direct mail campaign was successful, while a low conversion rate means potential customers might not find value in your offers. However, to set more meaningful targets for future campaigns and gain a competitive advantage, it’s useful to benchmark these numbers against competitors within your industry and your other marketing efforts.
  

• A/B testing – A/B testing, also called split testing, allows you to compare two different types of creative messaging, sizes, formats, or postage options to identify the best cost and conversion rate. Essentially, you split your target audience into two groups, then test a single variable in each group to identify successful direct mail campaigns. For example, in one group you would test the effectiveness of promotional postcards and in the next, you’d test how group members respond to product catalogs. Or you can even go more minute—giving both groups a promotional postcard, but with different sized or colored typeface. A/B testing helps you identify which campaigns are the most effective at generating new customers, retaining current customers, and driving long-term profit. 
  

Key Performance Indicators (KPI)

Setting up metrics to help you collect data is a solid first step in how to measure direct mail effectiveness, but you still need to know how to analyze the data you collect. That’s where key performance indicators, or KPIs, can help. 

Let’s go over some examples of KPI in a targeted direct mail campaign:

• Return on Investment (ROI) – So was your direct mail campaign worth it? While there’s no simple way to answer that question, one metric that may be the most helpful in determining your answer is your return on investment, or ROI. Ideally, every campaign would yield a positive ROI, but you need to consider your specific goals before you determine how successful your campaign was. For a campaign whose main goal is awareness, you may not be looking for a positive ROI. Similarly, if your campaign bred repeat customers, then those customers’ lifetime value to you is more than is reflected in your ROI. Whether a campaign is a success or a failure is never as simple as one metric.
  

• Average Order Value (AOV) – This metric tracks the average dollar amount spent by each customer who uses your personal URL, QR code, telephone number, or coupon. To calculate, divide the total number of sales by the total number of orders or purchases made. Ideally, AOV should be monitored daily or weekly to help understand the success or failure of direct mail campaigns. 
  

• Cost Per Acquisition/Order (CPA/CPO) – CPA/CPO is a key metric that measures how much a company pays for each direct mail advertisement that results in an order (or new customer acquisition). 
  

Incremental Results

Incrementality refers to additional business that you wouldn’t otherwise receive as a result of a marketing tactic. To that end, understanding how much incremental revenue or customers your direct mail campaign is attracting can help you identify effective strategies that you can use in the future. 

For example, if you’ve recently dispatched a QR code on your direct mail advertisements and analytics show that you’re converting 50 customers for an additional $500 revenue through the code alone, this strategy might look promising but you don’t necessarily have the full picture.

To measure incremental results, the best tool is a control or holdout group.  Holdout groups help to identify which matchbacks are deserving of credit within the direct mail marketing campaign. In other words, a holdout strategy helps to determine whether or not direct mail influenced customer conversion rates. In the same example, the holdout group would not receive the mail advertisement with the QR code, while the rest of the target market would. Over time, advertisers can compare the conversion rates of the holdout group versus the group that received the QR code to understand the incremental value of the code. 

AttributionKey Considerations

When you have multiple types of marketing happening at the same time, measuring your results becomes important. While all the direct mail tracking methods we stated earlier can help with campaign measurement, there are some things to keep in mind:

• Length of time – The post office takes time. People may let their mail sit for days before reading it. This all means that direct mail responses will take longer than responses to a digital campaign, so you need to monitor it longer. You may not see the full effect of your campaign until months after. Typically, a full Direct Mail response curve is 90 days.
  
• Reliability – We already mentioned how people may forget to use a promo code. There are also technical restraints that could make your tracking method less reliable. You need to take every possible step to ensure reliable information.
  
• Control groups – Much like a scientific experiment, to ensure you measure effectiveness in the best way possible, it’s advisable to have a control group of customers you don’t send your mailing to. Monitoring this group will give you a comparison point to measure your mailer’s effectiveness.
  

Since it is a complicated subject, we have a page that goes more in-depth and explains our approach to direct mail attribution.

Measure Your Success with Poplar

Understanding how to measure a direct mail campaign is essential to your business, though sometimes, it can be complicated. It involves finding reliable data and knowing how to analyze that data once you have it. The more data you have, the better you can target, and the more optimized your campaigns can be in the future.

Looking for the perfect direct mail solution? We can help. At Poplar, we’re direct mail experts. We believe in the effectiveness of direct mail, but we don’t simply rest on our beliefs. Our platform has multivariate testing capabilities built-in. That means you can easily and efficiently compile the most important data so you can create the best and most optimized direct mail campaign possible—all with a little help from the experts at Poplar.

Sources: 

1. USPS. 6 Ways to Measure Direct Mail Success. https://www.uspsdelivers.com/6-ays-to-measure-your-next-direct-mail-campaign/ 

2. Non-Profit PRO. Retargeting Revealed. https://www.nonprofitpro.com/article/doctors-without-borders-uses-remarketing-retargeting-extend-reach/all/ 

3. Chron. What Is the Average Rate of Return on a Direct Mail Campaign? https://smallbusiness.chron.com/average-rate-return-direct-mail-campaign-23974.html