We all know that if we did nothing with advertising – no TV, radio, direct mail or email, there would still be a percentage of people that buy from us. There are some that would buy because they know us from our location, from their friends, etc. Of course it is a little more complicated than that because almost everyone does some kind of advertising. In addition, there are times we experiment or try new approaches.
What is the real uplift it creates? What is the actual increase in sales or profit generated as a result of your advertisement? That’s the answer we really need to know, isn’t it?
There is a simple way to measure your success with email and direct mail. Regardless if you use mass mailings, segmented lists or decide to use data analytics to nail down your target list, you can do this simple test. Take your email or mailing list and pull out a minimum of 10% and use it as a control. That 10% should not receive the advertisement you plan to send to the other 90%. The goal is to see the exact ROI of the 90% you advertise this specific ad to; compared to your 10% control list that receives your normal communication message. For sales, measure the ROI over a 30-day period. For service, you will want to measure for 45-60 days depending on your offer.
Hundreds of elements can be measured with direct marketing communications. An email or mail list, headlines, offers and creative can all be measured and need to be isolated to know the true impact each element has. But, to know from an ROI standpoint - did this advertisement provide more sales and profit over and above what you normally would receive… start measuring against a control list.
Below is a link to a very basic study we did using this control method that you can easily apply yourself. Click on this link and go to the image at the buttom of the blog.