Best Lead Generation Metric: Response or ROI?

The debate seems to be in favor of ROI. After all, what good is spending money on marketing when you’re not getting much of the money back in return? Yet on the flip side, is ROI truly a mark of effective marketing or is it simply because some financial aspects are in the favor of one channel? In the contest between email and direct mail marketing, the statistics below demonstrate an even case for both.

 

In the Direct Marketing Association’s 2012 response rate report, email has been touted as possessing higher ROI while direct mail boasts higher response rate.

 

The score is as follows: direct mail had 30 times the 0.12% response of email among households but the latter had $28.5 ROI compared to only $7 for direct mail.

 

There are also other variations according to message type as well as recipients. Letter-sized direct mail garnered 3.95% response rate from households while prospect lists yielded 1.44%. Consumers responded more positively to catalogues compared to business prospects. Meanwhile postcards fared somewhere in the middle with 2.47% response rate for B2C and 1.12% for B2B.

 

Unfortunately, the cost of letter mailing reached $556 for B2C and $919 for B2B. And despite the seeming advantage of a higher response rate, that same rate had actually been dropping 25% over the course of nine years.

 

Not all hope seems lost though. The rise of email marketing has also brought with it the side effect of desensitized consumers (both for B2B and B2C). With so many marketing emails sent to inboxes, it’s become easier to attract a response through channels that are no longer as cluttered. Whether this means that direct mail’s dwindling response rate will actually improve; only time will tell. So in the mean time, here’s a brief series of steps you can execute to ensure that both high-response and high ROI channels root out more inefficiencies.

 

ROI


  • Learn more about a process/tactic/tool and how to boost its performance.

 

  • Identify financial aspects and adjust performance indicators to minimize their influence.

 

Response


  • Identify the strongest sources of overhead costs and promptly minimize them.

 

  • Integrate other channels whenever possible to tie up ROI.
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