In his book The Direct Mail Solution, direct marketing expert and entrepreneur Craig Simpson provides easy-to-follow solutions for creating direct mail campaigns that work! In this edited excerpt, the author outlines the importance of the information you need to accumulate after each direct mail campaign has been sent out.

OK, so you just spent $3,000 on a direct mail campaign. Now it's back to business, just waiting for all those customers to flood into your store or call you on the phone, right?

Wrong.

Now comes one of the most critical parts of the entire campaign--assessing the results so you know:

  • Was it worth it to spend the $3,000 in the first place?
  • Of the two versions of sales pieces you tested, which one did better?
  • Which of the two mailing lists you sent to did better?

We're talking about tracking your mail campaigns. Tracking is about understanding every element of the mailing you just sent out so you can refine everything you do for future mailings. That's the only way to systematically get better results as you grow your business.

There are two things you can do to make tracking really easy:

  1. Use a dedicated phone line and/or URL/landing page. That way you know that 100 percent of the leads/orders came in from your direct-mail campaign.
     
  2. Put a tracking code or coupon on the mailing piece.

The next step is to collect that information from every customer or order that comes in. Whether it's printed on the coupon or the order form, or an operator requests it when people phone in, get that code every time.

But not only do you need to know the overall response from the mailing, you also need to know how many leads or sales were in response to each mailing list, each segment and each sales piece, if you're using more than one.

If you're testing the effectiveness of a new sales piece vs. the piece you're currently using--your control piece--you need to know which one performed better and which lists it performed better on.

To properly track each version of the sales piece and each list, it's critical that you do a good job of list segmentation, which is the process of systematically splitting up lists into smaller units to keep track of your different parameters.

For example, let's say you have five lists with 10,000 names each and you want to mail two sales pieces, a 16-page letter and a 32-page magalog. Here's one way you can effectively segment your lists:

16-Page Letter List Segmentation


List

Number of Names

Code Assigned

List #1

5,000

M1000A

List #2

5,000

M1001A

List #3

5,000

M1002A

List #4

5,000

M1003A

List #5

5,000

M1004A

32-Page Magalog List Segmentation


List

Number of  Names

Code Assigned

List #1

5,000

M1000B

List #2

5,000

M1001B

List #3

5,000

M1002B

List #4

5,000

M1003B

List #5

5,000

M1004B

In this example, you have two formats that you use on five different lists. That gives you 10 possibilities. You assign a code to each of them.

In the Code Assigned column, the Letter "M" represents your offer (product/service). The number (1000 to 1004) represents the list. And, the last letter (A or B) represents the version of the sales piece (or price, etc.) you're testing. That code is printed on each of the pieces you send out--either as part of the address label or directly on the piece itself.

When orders start coming in, determine which of the 10 groups the buyer was in. If buyers return a coupon or order form, have the buyer write the code on the form; if the order form is the overleaf of the address panel with the printed code, it will automatically be included. If customers call in their order, ask for the code.

Keep track of how many orders came in from each group. After a certain number of days or weeks have passed, you can easily see which of the 10 possibilities brought the best results.

Was the Mailing Worth It?
When tracking the profitability of a direct mail campaign, make sure you track all the costs associated with the mailing. That means tracking the cost for the printing, list rental, data processing, mail processing and postage. If you're directly selling a product, you'll also want to make sure you take out the product cost for each order fulfilled.

Taking out the costs associated with the mailing and the product fulfillment will help show you the true profit/loss for each mailing. You need these accurate numbers so you can determine your cost per acquisition (CPA) or your cost per inquiry (CPI).

You also need to keeping track of the list history so you'll know which lists to order in the future. Keeping a list history means you track the performance of one specific list over the course of each of the times you've mailed to it. Watch the response rate. Do you see a lift in response when you mail it in one month vs. another? Do you see a decline in response the more frequently you mail it? Does it give your business a boost in your slow season? Is it worth mailing each month?

Keeping track of list history helps you identify which lists perform consistently well time and time again, which lists are on a downward trend, and whether there are any lists that work better in one season than others.