The Department 3 Blog
Analytics & Tracking: Making or Breaking Your Direct Marketing Success
March 15, 2019, Michael Concannon
In previous posts, we’ve looked at two pillars of a successful direct marketing campaign: clean, up-to-date data and proper segmentation of that data. While these can’t be stressed enough, there’s a third pillar equally important to your success: properly tracking and measuring your campaigns.
This may seem to be the most obvious part of running any marketing campaign, but for direct mail it’s of particular significance.
Snail Mail vs. Email
The largest competitor to direct mail is email. As Digital Doughnut noted, a decline in printing costs has only gone hand-in-hand with an increase in postage costs. A study from Citipost Mail notes that direct mail has an average ROI of 7-to-1, while email has a return of 38-to-1. Clearly, email remains a cheaper option, with low start-up costs and a high ROI.
On the other hand, according to the Data and Marketing Association’s Response Rate Report, the household response rate for direct mail is at 3.7%, compared to email at a mere 0.12%. Plus, direct mail still performs better at new customer acquisition.
As Jeff Sopko notes in an article on direct mail and analytics, “direct mail uses real, definitive transactional data to optimize lists and identify prospects for acquisition”.
That’s exactly why tracking your campaigns is crucial to seeing a better ROI. Properly measuring the effectiveness of a campaign, attributing responses and applying insights is what makes direct marketing powerful.
Regularly updating tracking data with detailed information about how your campaigns are being received by target audiences is vital. You can’t improve and optimize your marketing efforts without the proper insights into your campaign performance.
Any successful marketer needs to match response channels to each and every campaign, giving you valuable insights into what’s working – and when it’s working.
Timeliness Is Key
Timely analytics and tracking updates – whether they are daily or weekly reports – allow you to make rapid decisions and appropriate changes for future campaigns, such as data purchases or creative changes to messaging. What works now may not be as effective in a month’s time, so timeliness can be pivotal to a campaign’s success.
While it’s easy to assume a campaign is successful if there’s an uptick in sales or leads, the reality may be far more nuanced. Taking note of how a lead responds to different types of messaging, for instance, or what time of day they’re most likely to open your mailing, could make or break your next campaign.
One of the major reasons that direct marketing campaigns may take longer and be costly is the manual work involved. Take ABM direct marketing, for instance. As pointed out in DMNews, “One of the biggest caveats with highly-personalized direct mail campaigns is cost. Putting together handwritten notes can be a time-consuming process. For marketers, the challenge becomes orchestrating campaigns that will produce the most productive results for the effort.”
On the flip side, this makes direct mail uniquely unlike other forms of advertising.
A More Personal Pitch
Direct mail is seen as a more personal, more trusted form of marketing than email, which is considered to be quick and informal. Direct mail reaches a smaller audience than channels such as television or radio ads, which allows you to make the messages more personalized and relevant to your targeted consumers.
This personalization depends on your data and segmentation. But the key to keeping your audience appreciative of this personalization is to track which campaigns are doing well, then use those insights to optimize your marketing efforts.
If you think it’s time for new sales and higher response rates, this kind of data optimization is the foundation you need to build from.
Address Matching for 360° Attribution
Address-based matching helps give a marketer a more complete picture of all the leads that are engaging with them, particularly at their website. Many marketers simply do promo-code-based attribution, but there’ll be names on their leads list who will visit the site without referencing the mailer or its promo code. In some cases, they may have been influenced by the mailer but responded through another channel, or were driven to the site completely outside of a direct mail campaign.
By matching a recipient’s physical address on a mailing list with their desktop or laptop IP address, marketers can identify them when they visit the site. This gives them useful insights into target behaviors, actual campaign performance, and how their total marketing mix is performing.
Building a Baseline with Holdouts
The incrementality of direct marketing allows unique insights into your customers through holdouts. As the only channel that can be completely isolated, holdout testing allows you to measure the incremental ROI of your direct marketing campaigns and measure how effective they are compared to your other marketing efforts.
By removing a group of your customers (your holdout group) from your direct mail efforts, their sales and response rates become a baseline against which you can measure your campaigns’ incremental lift.
Armed with this knowledge of what’s most effective, you can adjust your campaigns for downstream optimization.
A Last Word: Picking the Right Analytics Provider
One caveat to keep in mind? When evaluating different data analytics and tracking tool providers to help optimize your direct marketing campaigns, power and features alone are not enough.
Platforms that are extremely technical and non-intuitive to use can become overwhelming and lead to human error, misusing data, and misidentifying trends. Which result in poor targeting and subpar campaign ROI.
Best-in-class analytics and tracking technologies are intuitive and easy to use. The platform or service you choose should allow you to mine data and report results exactly the way you want to in order to ensure you’re running the most precise and cost-effective campaigns possible at every step, from targeting and segmentation through execution and analytics.
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