How Modest Changes Impact Direct Mail ROI

Modest changes in direct mail campaigns can have a substantial impact on campaign ROI.  We’ll use the Direct Mail ROI Calculator to demonstrate this with an example.

Let’s look at a theoretical direct mail campaign for a software company. They are mailing out 10,000 pieces at a cost of $25,000 with a 6% expected response rate, 10% conversion rate, and $400 profit per sale.  Excluding any follow-on revenue from service contracts and upgrades, this campaign is just short of breaking even with a negative 4% ROI. They re-examine their mail piece and make design changes that don’t affect cost, perhaps changing color and word placement or making the web address more visible.  These changes increase the response rate from 6% to 7%. The improvements cause the campaign ROI to jump to positive 12% and they make $3000. Seeing how these modest changes have such a positive impact, they look at how the sales staff pursues the new leads. Simply by providing the sales staff with more information about the promotion, the post-campaign conversion rate climbs modestly from 10% to 12%. This relatively small gain results in a 34% ROI and $8600 in profit.

Try plugging in your own campaign numbers and see what happens if you make modest improvements.

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