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September 21, 2021

How to Use Direct Mail Tracking to Optimize Campaigns

Despite the industry’s advancements in analytics, 84% of marketing teams say they struggle to prove financial returns on their marketing activities.

This challenge can be especially true for direct mail. Marketers often see imprecise attribution with direct mail because campaigns are physical. They lack the tracking utilities of digital marketing like UTM codes and browser cookies.

The good news is you can use a number of tracking methods to monitor your direct mail campaign performance. Follow these steps to optimize your campaigns to deliver better response, conversion and ROI.

Tracking your direct mail campaign

Until recently, you had two choices when it came to tracking direct mail campaigns. First, you could outsource the whole project to an expensive commercial printer that provides no attribution. Alternatively, you could piece together a hodgepodge of agencies and in-house people to strategize, design, and execute the campaign, then manually collect the resulting data.

Today, everything has changed with digital technology. The only physical thing about tracking modern direct mail is the piece itself.

Direct mail platforms like Lob enable you to create and automatically send event-driven pieces on demand. Finally, the highly personalized pieces you send can align with your brand’s digital touchpoints for the first-ever true omnichannel experience.

Imagine a direct-to-consumer fragrance brand. The goal of the campaign is to acquire new customers and the marketing team employs a variety of tactics including paid ads, email marketing, and social media. To team also employs direct mail as a complement to the other tactics. Lob's research shows that when digital and direct mail are combined, marketers see: 40% conversion rates, 68% increased website visits, 63% increased response rates, and 60% increased ROI.

Once your analog communication is powered by these digital automation capabilities, your team will gain visibility into what’s working, what’s not, and how to improve in real-time. As new direct mail insights start rolling in, you can spot trends, make predictions, and optimize your campaign for your next send. That means no batching, no manual data collection and analysis, and no wait-and-see decision-making.

Segment for smarter tracking

To track the responsiveness of segments, you can send mail to different cohorts based on:

  • Geography. Urban apartment dwellers, for example, express different needs from their suburban and rural home-owning counterparts.
  • Demographics. Consumer needs evolve as they move through life’s stages. 
  • Behavior. Gone are the days of showing people irrelevant products or inviting them to rate their customer service phone call before their issue is resolved. Tailor your direct mail to your customer journey and use it to acquire more customers, decrease churn, and increase customer lifetime value.
  • Interests and hobbies. Experts at RetailWire report that 66% of consumers discuss mail that addresses their interests — even if they’ve never encountered the brand before.

When direct mail, segmentation and tracking connect, the possibilities are endless.

Choose your direct mail tracking method

Most marketers agree that to improve a performance indicator, you must first measure it.

If you use Lob for your direct mail campaigns, you’ll have a number of tracking methods to choose from including:

Personalized URLs

Personalized URLs (pURLs) are one-of-a-kind web addresses that take consumers to unique landing pages created just for them. Many brands use this personalization tactic to include a customer’s name, but pURLs can go beyond first names. You can give customers an URL with their neighborhood name in it or have it name their pain point or the product/service they need.

If you place personalized URLs on your direct mail, plan to wow your visitor with a creative landing page experience. Match your mailing’s design on the page to create a consistent experience and confirm they’ve arrived. Use big, bold letters to communicate a unique-to-them experience.

You can use Lob to see how many direct mail recipients visited the landing page. But there’s no need to stop there: The unique microsite or landing page is also a great way to collect more customer data, like site behavior or an email address.

With Lob, you don’t need separate, specialized pURL landing page point solutions.

QR codes

Some recipients will inevitably enter pURLs incorrectly from direct mail. With QR codes, you don’t need to worry about this. People simply scan a matrix barcode and are whisked away to a page you provide.

QR codes are fast and convenient—but consider your audience: access to mobile devices and familiarity with technology is key. A recent survey conducted by The Drum found that only 31% of people aged 65 and above have used a QR code recently.

That said, usage is rising. The same report showed that three out of four consumers say they anticipate using QR codes from now on. And there’s no need to write off the other 25%. Instead, consider including easy to follow instructions.

Discounts and free gift codes

Another way to track your direct mail responses is to send consumers codes for discounts or free gifts. Give this special offer only to direct mail customers. When they redeem it, you know the transaction comes from your direct mail campaign because you only sent the code to direct mail recipients. Muddying your offer by allowing it on other channels makes it harder to track.

Free things can incentivize customers to self-report changes in their personal contact information and provide more personal information to your brand.

Trackable phone numbers

You’re not limited to pURLs or QR codes for accurate direct mail tracking. Use a unique phone number to monitor consumer behavior over time and by sub-segment.

Envision a DTC oral care and smile enhancement brand that designs their direct mail creative with unique phone numbers for new-patient specials.

  • People close to elementary schools may receive a phone number so the brand can track interest in teeth straightening services and wisdom tooth extractions.
  • Families who show interest in long-term care facilities could be targeted with denture fitting kits, tooth repair offers, and gum disease self-screenings or treatment options.
  • Those in affluent urban settings with lounges, office buildings, and shops nearby could receive trackable phone numbers to get information about cosmetic and smile-upgrade options like alignment, whitening, and veneers.

Until recently, a common question in call centers was, “How did you hear about us/this offer?” Now, you don’t need to wonder. The right direct mail automation platform can send and track pURLs, QR codes, discount codes, and unique phone numbers.

Direct Mail KPIs to measure

Using Lob’s Intelligent Direct Mail Tracking, you can capture a mailpiece’s movement as it travels through the mail stream. Then, you can follow whether recipients responded and took the desired action. And after that, you're able to measure ROI and iterate for future campaigns — the ultimate goal.

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With this automatically aggregated data, Lob users can work backward to schedule mail drops based on their goals. Here’s how.

Response rate

Ready to increase your ROI? First, you must figure out how much you spent and how much revenue those investments generated.

Start by adding up all your costs. Next, tally up how many responses you got from your campaign. The formula couldn’t be simpler:

Responses/Mailpieces Sent = Response Rate

Conversion rate

Next, you'll want to examine your conversion rate which is the percentage of recipients that used the offer in your mailpiece. Again the formula is simple:

Number of orders/Responses = Conversion Rate


ROI

Response rate and conversion rate are both important KPIs to measure but the holy grail is ROI. ROI gives you a measure of how successful your campaign was. 60% of marketers say they get better ROI from direct mail than any other marketing channel.

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Source: Media Logic

To calculate the ROI of your direct mail campaigns, divide the net profit by your total campaign investment and multiply that by 100:

Net Profit / Total Investment x 100 = ROI


Use direct mail results to inform other channels

Now that you’ve seen how digital tools can supercharge direct mail campaign optimization, think about it in reverse. The insights you gather from your direct mail tracking don't need to be limited to improving direct mail campaigns — the lessons learned can inspire, inform, and improve digital ones, too.

The key is to use digital and automation tools to analyze the campaigns that work. And once you learn the many ways to test, track, and re-test your direct mail campaigns, you’ll find they’re more deserving of your time, attention, and budget than any other channel.

Get a Lob demo today to learn how you can automate and streamline your direct mail efforts in a way that gives you instant visibility.

To learn more, get our latest guide, the Direct Mail Tactics Playbook.

This blog provides general information and discussion about direct mail marketing and related subjects. The content provided in this blog ("Content”), should not be construed as and is not intended to constitute financial, legal or tax advice. You should seek the advice of professionals prior to acting upon any information contained in the Content. All Content is provided strictly “as is” and we make no warranty or representation of any kind regarding the Content.

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