Hello and welcome to a case study presented by the marketing team at Mail Shark.
This particular case study will help you gain a better understanding of how to track your return with direct mail so that you can have the ultimate insight on direct mail’s true impact on your business.
It’s no secret that direct mail is one of the most effective ways to drive customer traffic and sales. What isn’t as clear is the true short term and long term impact of direct mail advertising on sales and most importantly, how you should be analyzing your return.
Getting these answers is not always easy and analyzing the results of marketing campaigns can be a difficult task. So we rolled up our sleeves and put our own system to the test by showing you the difference between how most business owners track the results of a direct mail campaign and how it should actually be tracked.
The Concept – Mama’s Pizza & Grill
Our test subject is a Mama’s Pizza & Grill restaurant located in Shillington, Pennsylvania. Mama’s Pizza is an independently owned pizza shop serving a variety of specialty pizzas, subs, salads, wings, and more. Mama’s Pizza offers Dine-in, take-out, and delivery to an area of about 10,000 homes in a 3 miles radius. For this case study, we set out two direct mail pieces.
We started by printing and mailing 10,000 menus over a 4-week time period from August 1st, 2012 through August 26th, 2012.
After that, we immediately started mailed 10,000 magnet coupon mailers to the same list from August 29th, 2012 through September 23rd, 2012.
Quite simply, 99% percent of all business owners would count the number coupons they received to determine if this campaign was a success. So let’s do that. We’ll look at the total coupons redeemed from a 7 month time period starting from the beginning of the mailing in August 2012.
Mama’s Pizza redeemed a total of 1,301 coupons between August 1st, 2012 through February 28th, 2013.
By counting coupons, there’s a tangible result of a 6.5% return in coupons alone. 1,301 coupons is an unbelievable return on this direct mail campaign, but does this really show the true ROI on this campaign?
As we’re about to show you, not completely.
A Bigger Picture on the ROI– Call Tracking Phone Numbers
So what we did to get a deeper look at this return this investment was to place a specific call tracking phone number on each of the mail pieces. Each piece contained a different trackable phone number. A customer calls this number and the phone call is automatically forwarded to Mama’s pizza all the while tracking the number of calls coming in using that number.
These call tracking phone numbers allowed us to track new unique calls versus repeat calls to identify new orders and repeat customers. The numbers also allow us to track all calls by time frame so we can analyze return over an extended period of time.
So let’s take a closer look at these numbers. The first thing we want to look at is the short term versus long-term impact.
August 2012 through September 2012 – Mama’s received 1,246 phone calls from the mailing.
October 2012 through February 2013 – Mama’s received an additional 2,473 phone calls after the mailing.
Why is this important?
It proves that our mail pieces actually generated more of a response in the five months after they were in homes than they did during the first two months when the pieces were mailed out.
But now let’s break down those calls by looking at new versus repeat calls.
Out of the total 3,719 calls, 1,892 phone calls were unique calls and 1,827 were repeat customers calling in.
So why is this important?
Not only are we driving new business but we’re also giving your customers a mail piece that remains in their home, so they can place repeat orders.
And now, the final analysis. Counting coupons versus total calls. We can now see that we’re comparing 1,301 coupons collected versus 3,719 calls, so we could have been grossly and ineffectively tracking the value of this direct mail campaign if we know only been counting coupons alone.
With this information collected, we can now see that there were 2,400 more calls than coupons and a total phone call response rate of 18.6%. Now don’t get us wrong, tracking coupons is important. They can help you see what the customers are responding to and what deals are profitable and working best for you.
And let’s face it, everyone likes to see and feel a tangible result for the marketing dollars they’re spending. But in and by itself counting coupons cannot be the only consideration for ROI. The right piece, done properly, will be retained for a longer period of time.
In conclusion analyzing your return is a multi-tiered approach you should:
- review coupon redemptions,
- analyze sales,
- compare new and repeat orders,
- understand the lifetime value of the customer, and
- understand the brand awareness that these direct mail pieces bring to your store.
Well, we hope you found this case study informative. Also you can see more testimonial videos on why our clients think that you should be using Mail Shark for your marketing needs by visiting our video testimonials page.