Studying the ROI in Direct Mail Marketing Campaigns

Advertising by directly sending marketing material to letterboxes is a successful marketing used by all types of businesses. A direct-mail or a letterbox distribution campaign can focus on a target audience, regardless of the size of the target audience. Numerous marketing issues control the rate of return on investment, which differs for various campaigns.

Rate of Return on Investment

The average expected ROI on direct mail or letterbox distribution campaigns is usually one to two percent, as per research undertaken by Flyers Direct. Brochure distribution in Sydney figures increase when the target consumer is more exposed to that particular brand.

Creating artwork with a solid call-to-action will increase ROI.

Estimating Financial Return

The average return on investment on a standard letterbox distribution or a direct mail campaign can be assessed by considering four important factors:

  • A strong compelling unconditional call to action
  • The number of flyers being distributed and frequency of the letterbox campaigns
  • Rate of inquiries
  • Conversion rate

Deducting the campaign expenses and dividing the whole sum by the expense of the campaign gives us the precise rate of return on investment.

  • Say a company spends $1,000 on a campaign of brochure distribution in Sydney sending out 100 brochures marketing a merchandise for $50
  • 10 people respond to the advertisement
  • Five people buy
  • In this instance, the calculation is – 50 x 100 x 10 x 5; deduct a thousand from that product and then divide the remainder by a thousand which gives 249, or roughly 25%.

Planning an Efficient Marketing Operation

Calculate the efficiency of a marketing campaign by evaluating the financial return of the direct mail advertisements. The outlay comprises the printing and distribution investment. For example, if a company marketing budget is $150,000 and the product sells for $2000, to approximately 75 people – a ROI of approximately 2% is break-even.