Marketing effectiveness – measuring the long-term impact of direct mail and other channels

In our previous blog post on return on marketing investment (ROMI) and seeing the bigger picture in terms of measuring the effectiveness of all marketing channels together, we explained why it is important to not only calculate return, but also track it over time.

The question is: what do you do if a marketing channel shows a declining trend, or if its ROI is less than other channels?

Pulling customers through the sales funnel

The temptation is to pull back tactically on that particular channel in favour of less expensive, and arguably more effective, channels. Moving the marketing budget to maximise effectiveness can happen frequently – however, most marketers know intuitively that channels can and should work together to pull customers through the sales funnel. This is often difficult to prove because media reporting is usually ‘last click’ only and/or is not granular or complete enough across all channels.

Some channels are more effective at influencing and raising awareness, others are better at converting and some work best in combination to keep the customer in the sales mindset. So, how do you prove this to a board of directors who may be looking for marketing budget cuts and who perhaps only see a sizable difference in cost of sale and ROMI between channels? And how do you know the longer-term impact of pulling back on some channels in favour of others that seem to be more effective?

Direct mail resurgence

Direct mail is a good example of a channel that, on the face of it, can be rather expensive and may be at the top of the list in terms of budget cuts. However, direct mail has seen a resurgence during the global pandemic period and, although it is still seen as expensive, it has some very interesting marketing characteristics.

Interestingly, in our recent blog post on measuring the carbon footprint of various marketing activities, Kg CO2 per sale for email was shown to be higher than for printed direct mail.

At UniFida, we have been studying direct mail results using our unique marketing attribution solution, which provides detailed ROMI over time for different channels. It also shows where in the sales funnel each channel is most effective with particular types of customers – i.e. existing customers, or those new to a brand.

Retail example

One of our retail clients is seeing some interesting results. In the graph below, direct mail in the form of catalogues is seen as most likely to impact sales in combination with another media channel and, by contrast, Search Engine is most likely to act on its own.

marketing channels working together graph

As this client expected, the ROMI for direct mail is lower than a number of other channels, but it is having the strongest influence at the start of the sales funnel – meaning that it is creating awareness, leading to new sales through encouraging steps, such as searching online and creating sales that otherwise would not have happened.

This is illustrated in the chart example below where the strength of direct mail activity is at the Initiator stage (the start of the sales funnel) against other channels. By comparison, for this company email has a stronger influence in the sales Closer stage.

Media influence in the sales funnel graphWhen we looked at the impact of media in converting new customers, the % influence of direct mail (catalogues) at the start of the sales funnel was even more pronounced, but email was less of a Closer and its influence on new sales was more evenly split across the sales funnel.

Quite often companies have individual contact details and permissions for direct mail and not for email, as customers find the former less intrusive. ‘Cold’ direct mail is also an option, with quality data providers offering targeted individuals with permissions to mail.

Speak directly to a targeted audience

Direct mail can work well for even the most complex propositions and, with third-party cookies being phased out, it represents an opportunity to speak directly to new, highly targeted audiences. It is also easy to test – however, it’s important to ensure that your measurement looks at the bigger picture in terms of ROMI.

Direct mail may also be adding to the effectiveness of the entire sales process, so you need to evaluate how it is bringing in more valuable customers than would otherwise be difficult to reach.

So, when looking at your marketing results, the challenge is to step back and examine the long-term impact of the marketing mix. For every channel you should consider the balance between individual channel ROMI, the interactions between channels and the role each is playing in funnelling sales.

Proof of concept

UniFida can deliver the required expertise and technology ‘out of the box’ to help you automate ROMI evaluation. We can start with a low-cost proof of concept to demonstrate how ROMI can be calculated for your business.

For more information email [email protected] or call + 44 203 9606472.

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UniFida is the trading name of Marketing Planning Services Ltd, a London based technology and data science company set up in 2014. Our overall aim is to help organisations build more customer value at less marketing cost.

Our technology focus has been to develop UniFida. Data science business comes both from existing users of UniFida, and from clients looking to us to solve their more complex data related marketing questions.

Marketing is changing at an explosive speed. Our ambition is to help our clients stay empowered and ahead in this challenging environment.