Is Your Direct Marketing Working? What Can Numbers Tell You?

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Is Your Direct Marketing Working? What Can Numbers Tell You?

As marketing professionals we’ve always been told to mind our business numbers. Hopefully, that the lesson has sunk in. But if not, here is evidence to demonstrate the power of numbers.

Tracking vital numbers is the key to success. Take a sport such as cricket. The two teams constantly check the run-rates during the game. The scoreboard tells them who is in the lead. If they don’t keep track of the numbers during the game then there is no way to determine if your team is on its path to win or lose.

Your business is in a constant game against other businesses. You have to track your business numbers to determine whether or not your players need to practice harder or send in strong “opening line” of players.

What does tracking ultimately mean to your business?

Tracking the numbers is important in determining how well your business is doing. Marketers need to understand the principles of direct marketing. Direct marketing involves providing the right offer to the right people at the right time.

The following six ways help to track whether or not your direct marketing is effective. You can analyze its effectiveness through the number of responses and purchases from your customers.

Direct Marketing Question #1: Am I communicating in the right medium? How many inquiries am I generating?

Direct Marketing Question #2 What is the cost of fulfilling these inquiries?

Direct Marketing Question #3: How many inquiries are converting into sales?

Direct Marketing Question #4: What is the average order value?

Direct Marketing Question #5: What are the total sales generated from each medium?

Direct Marketing Question #6: What is the cost-to-revenue ratio?

The following example will help explain things better.

The following is the data collected from an advertising campaign run by a manufacturer of watches who was selling directly:

Publication used:

A National Daily::Spend (INR) 37,120::Inquiries 60,848::Cost per Inquiry 0.61::Ranking 1

A Womens Fortnightly::Spend (INR) 23,920::Inquiries 19,856::Cost per Inquiry 1.20::Ranking 4

A Womens Monthly::Spend (INR) 93,504::Inquiries 1,32,528::Cost per Inquiry 0.71::Ranking 2

A Business Weekly::Spend (INR) 3,37,088::Inquiries 4,49,450::Cost per Inquiry 0.75::Ranking 3

A Fashion Monthly::Spend (INR) 92,496::Inquiries 41,952::Cost per Inquiry 2.20::Ranking 5

When the manufacturer reviewed the results after 4 months to see which inquires had converted to sales, he found that the publications had performed differently.

A National Daily:: Inquiry Rank 1::Fulfilled inquiries 50,572::Fulfillmet Cost 27,056::Customers 5,792::% conversion 11.4:: Conversion Rank 4

A Womens Fortnightly::Inquiry Rank 4::Fulfilled inquiries 17,072::Fulfillmet Cost 8,752::Customers 2,512::% conversion 14.7:: Conversion Rank 1

A Womens Monthly::Inquiry Rank 2::Fulfilled inquiries 1,11,488::Fulfillmet Cost 58,192::Customers14096:: % conversion 12.6:: Conversion Rank 2

A Business Weekly::Inquiry Rank 3::Fulfilled inquiries 3,92,608::Fulfillmet Cost 1,91,248::Customers 23,136::% conversion 5.9:: Conversion Rank 5

A Fashion Monthly::Inquiry Rank 5::Fulfilled inquiries 36,240::Fulfillmet Cost 18,384::Customers3616:: % conversion 11.7:: Conversion Rank 3

Finally, the manufacturer made the most important of all analysis to find out how much sales revenue was generated and compared it with the cost of advertising and fulfilment to figure out the efficiency. Here is how the publications stand after this analysis.

A National Daily:: Inquiry Rank 1::Conversion Rank 4::Average Order 848::Total Sales 3,04,400::Total Cost 86,496:: Cost to Revenue 28.4:: Efficiency Rank 1

A Womens Fortnightly::Inquiry Rank 4::Conversion Rank 1::Average Order 1040::Total Sales 1,63,520::Total Cost 47,024:: Cost to Revenue 28.8:: Efficiency Rank 2

A Womens Monthly::Inquiry Rank 2::Conversion Rank 2::Average Order 816::Total Sales 7,13,984::Total Cost 2,07,792:: Cost to Revenue 29.1:: Efficiency Rank 3

A Business Weekly::Inquiry Rank 3::Conversion Rank 5::Average Order 720::Total Sales 10,46,800::Total Cost 7,30,576:: Cost to Revenue 69.8:: Efficiency Rank 4

A Fashion Monthly::Inquiry Rank 5::Conversion Rank 53::Average Order 816::Total Sales 2,18,128::Total Cost 1,66,864:: Cost to Revenue 76.5:: Efficiency Rank 5

As you see from the first table, the publications appear to behave in a particular manner. Had the manufacturer stopped analysing after this stage the conclusions would have been totally different from what we conclude now after the third table.

The second table gives an analysis of how the publications performed on the conversions. This changes the conclusion from the first table. The third table, finally, gives the overall picture of the complete exercise. If one had gone by the initial results itself, the results would have been completely misleading.

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