SMART BLAST

Return on investment. It is the lifeblood that drives the direct marketing industry. The single measure of success. The benchmark for all best practices.

Isn’t it?

Direct marketing is an industry that is rich with the stuff of math and analysis. But ROI is just one of many measurements that fall along the spectrum of program elements:

Response Rate: The sexiest of all measures – or most depressing. Response rate essentially measures the extent to which an appropriately targeted audience acts on a compelling offer. The higher the response rate, the more successfully list and offer were mated. This is a practitioner’s measure. Not surprisingly then, the most frequent and brisk discussions center on this metric.

Cost Per Lead: Now we’re getting to practicalities. This metric divides the number of dollars spent by the number of leads generated in a program. It’s a dollar measurement, not a percentage measurement like response rate.

Conversion Rate: This often has more to do with a sales team’s ability than the actual direct marketing campaign, but it shouldn’t be overlooked. Conversion rate is as much a practitioner’s as a sales manager’s measure.

Cost Per Sale/New Customer Acquired: The measure most widely used to evaluate program success or failure. It’s very useful because it’s a direct link between the measured results of a project, however accurate and complete, and the budget objectives set at the beginning.

But for direct marketing efforts to be fully evaluated, ROI must be included.

Return on Investment: ROI is a measure for those up the chain. It measures the value and productivity of money as it comes back onto the bottom line and then into the balance sheet, not as it goes out as budgeted or expended.

Setting aside lifetime value, ROI is the essential measure of real value in a campaign. It is the measure of the shareholder’s wellbeing, not the job security of a practitioner or the longevity of a contract for a vendor.

If you take the time to apply several measurements to your next direct marketing campaign, instead of just ROI, you might be surprised at what you can learn.