Quantity Versus Quality
How do you measure results with your advertising?
There are basically two ways to measure the efficacy of your advertising, both are not equal and one will lead you to discouragement.
You can measure advertising success by quantity or quality.
By quantity I mean the total number of leads. Quantity is a numeric value that most of the time has little or no real meaning. Let’s say you mailed 5,000 post cards out and it generated 200 leads but you made one sale. One sale against a $2,100 investment is not a very good value by most everyone’s standards. Quantity is not a good way to judge the success of a direct mail or any other program for that matter, as the end game you are playing is increasing your sales.
The second way to measure results is by the quality of leads. This method is most accurate since you are measuring directly your return on investment. Using a similar scenario, you mailed 5000 post cards out, got 50 leads, which turned into 10 sales and you grossed $18,000 in income against a $2,100 investment or 8.5X return on investment would be a good return by most anyone’s standards.
The number of leads is not as important as what you do to convert the leads. Getting a good return on your investment has more to do with quality than it does with quantity.
The following are important questions for setting yourself up for a good return on your investment for direct mail marketing:
- Are you set up to handle a lead once it comes in? Prompt contact and effective tracking is key.
- Are your sales people trained and drilled to handle and close the lead?
- Do you have a “buy now” that your sales people can use to close interested callers? This is usually something of a perceived value that your sales people can give the prospect if they make the decision to buy now.
- Are your front line people, receptionists, customer service and sales people informed about the promotion you are running? Lack of coordination could cost you thousands of dollars.
- Do you have a path for the lead to take that will be directed towards a sale and a repeat sale?
- What products or services make a good up-sell?
- How competitive is your product? (Based on what is available in the market place.) If your prospect has a better offer or product why would they call you?
- Do you have a strong reason for them to call today? A call to action is vital.
- Does your ad give too much information? The purpose of the ad is to create interest and get them to call or stop by to buy the product. You want to get them interested enough that they want to call for more information. Advertising is the art of “teasing” interest enough to generate a reach for service. When you provide too much information you often will kill the reach.
- Is your ad simple and direct? The prospect must be able to look at your ad and know instantly what it is and why they would want it. If your message contains too many products or is too wordy it creates confusion.
- Is the mailing list targeted to the best prospects for your product, service and the offer you are making? A quick survey of your present best customers, who are buying the product or service, will give you the criteria you need to get a list.
- Do you have a follow-up mail program for the leads that came in but did not buy, which will take them from mild interest to strong desire?
- Are you tracking the number of people who go to your website as a result of getting a post card from you? It is easy to get set up with Google Analytics.
- The above are areas that you should address to help you get the most out of a direct mail or any advertising program for that matter?
- Keep in mind that to effectively judge any advertising program, you have to have a system in place to track and allocate the response. The areas of response for most businesses are: walk-in, phone-in or web referral. Walk-in and phone-in are easy if your personnel ask leads coming in, and a record is made and reported to you weekly. Web referral can be a little tricky in that 75% – 90% of people, when they receive a post card, will do a search on the company or product before calling. If you ask how they heard about you, they might say the website. A good way to judge this is by keeping track of this through Google Analytics where you can see how many people did a direct search for your company. This means they typed in your company name specifically.
Here is a list of symptoms that will help you debug your direct mail program:
Low or no leads:
- Bad list
- Uncompetitive product
- Uncompetitive offer
- Poorly designed ad, usually confusing message or too many products being promoted at once
- No tracking system in place
Good to fair number of leads but low sales:
- Ineffective sales people
- Product is not what the prospect wanted
- Price or offer is not competitive, they found a better deal elsewhere
- No or poor follow up program
Low leads but high closing ratio:
- Depending on the number of pieces you mailed, your list may need to be refined to better identify your target prospects.
- If income is not enough from sales made, you may be calculating the worth of the customer incorrectly and/or you may need to look at the plan to up-sell inquiries.
Low leads and high closing ratio can be a good sign that you are on the right track and you need to refine the program gradually to increase the number of leads. This needs to be viewed in balance with the total number of pieces you mailed. If you mailed 15,000 pieces and generated 10 leads and you sold 8 of them, your ad is poorly targeted to your list or the list is bad.
There is nothing more cost effective than direct mail. Direct mail is simple to correct and the more you know about your customers the better you can target them.