As a marketer, it’s critical to quantify the effectiveness of your marketing efforts. But how do you define success? Particularly with 1:1 printing, it’s critical to use the right yardstick. Let’s look at seven ways to evaluate the success of a 1:1 print marketing campaign. Examples are greatly simplified for illustration and calculations do not include additional costs, such as postage and mailing.
1. Response rate
This is the simplest and most limited way to evaluate program success, but it is a good starting point. The challenge is that low rates don’t mean a program was unsuccessful. If the response rates jump from 1% to 4%, you’ve still achieved a lift of 300% over the previous campaign. If your product has a very high value such as mutual funds or sports cars, you can make millions with a lift of only a percentage point or two.
2. Cost per lead
Typically, marketers are used to thinking about cost per piece, and with traditional direct mail in the $.10 range, it’s hard for other print marketing to compete. But everything changes when you look at what your program costs per lead rather than per piece. If your mailing of 100,000 pieces achieves a 1% response rate, your cost per lead is $10. On the other hand, if you mail 25,000 1:1 pieces at a cost of $1.00 each, achieving a 12% response rate, your cost per lead drops to $8.33.
3. Cost per sale
Not all leads translate into sales. Divide the number of people who actually make a purchase into your total costs and this will give you the cost per sale.
If only 33% of respondents to the above static campaign make a purchase, for example, your cost per sale jumps to $30.30. Personalized campaigns are likely to result in higher conversion rates—say 50%—dropping the cost per sale to $16.67. As with cost per lead, this can change the cost benefit equation substantially.
4. Lifetime customer value
The value of the sale often goes beyond the initial purchase. If 1:1 personalization woos the buyer of one make of car to another, and if that customer becomes loyal to that brand, the return on investment from that piece includes the value of every car purchased by that customer over his or her lifetime. This is an important metric for marketers of long-term purchases, such as automobiles, financial products and insurance.
5. Cost of attrition
Not all bottom line benefits come from direct sales. If your goal is to prevent customer attrition, you can evaluate the success of your campaign based on what sales stay, rather than on what sales merely come in. One marketer of high-end vacations saved millions, for example, by sending vacationers 100% personalized booklets that reinforce their vacation choices. Its cancellation rates plummeted and its bottom line soared.
6. Cost savings
What if you could use 1:1 printing to cut costs? By personalizing its tax letters, one state government’s tax bureau made these letters easier to read. The result was a noticeable drop in calls to its call centers, saving hundreds of thousands of dollars. The change also increased response time. As a result, the state started receiving its revenues days earlier and significantly boosted its earnings from interest.
7. Ability to achieve a larger goal
Sometimes, your goal might have nothing to do with dollars. In Canada, one election was dramatically impacted by the use of 1:1 personalization to speak to voters about the issues they were interested in. One candidate’s campaign sent different voters different pre-election information cards based on issues recipients had previously selected as critical to their vote. The candidate won the election. What’s that worth?
It’s critical in any 1:1 print marketing campaign to measure your results. But before you do so, make sure you are using the right measuring stick.