Integrating Email, Direct Email Improves ROI

March 16, 2010

Integrated email/direct mail marketing programs bring benefits on both sides of the ROI equation: revenue and costs, according to [pdf] a new report from customer relationship marketing agency Merkle.

Integrated Programs Bring Higher Revenue, Margin
Consumers who receive both email and direct mail generally contribute more revenue per household. In terms of revenue, consumers who receive both email and direct mail on average contribute about $17 in revenue and $4 in margin per household.

merkle-consumer-value-contact-segment-mar-2010.jpg

In contrast, consumers who only receive email contribute an average of a little more than $15 in margin and a little less than $4 in margin per household. Consumers who receive direct email only perform even more poorly, contributing an average of about $9 in revenue and $2.50 in margin per household. Direct mail-only performance is not that much stronger than performance of consumers who receive neither type of communication (household averages of about $7 and $2, respectively).

Decrease Overhead to Maximize ROI per Contact
Increased marketing contacts generally drive increased revenue. However, the additional contacts may not pay for themselves from an ROI perspective. If email and direct mail contacts are evaluated in isolation, it is likely that a company’s efforts are not maximizing ROI.

merkle-consumer-value-dm-contact-frequency-mar-2010.jpg

For example, between zero and one direct mail contact, average household revenue rises from about $31 to about $38, and average net margin per household jumps from about $21 to $38. Average household revenue essentially stays flat between one and two contacts, while average household net margin drops to about $35. On the third contact, average household revenue increases to about $39, but average household margin falls to about $30.

To avoid large net margin drops and maximize ROI of multiple contacts, Merkle advises marketers take the following three steps to reduce overhead in their integrated email/direct mail campaigns:

  • Reduce agency and production costs by using a single creative agency and coordinating creative strategies and concepts.
  • Improve resource efficiencies by removing a layer of internal overhead required to manage separate creative agencies, strategies and concepts.
  • Improve the customer experience through consistent messaging in both forms of communication.

Email Marketing Metrics Improve in Q4
North American email marketers saw an increase in both open and click rates in Q4 2009 compared to the same period in 2008, according to Epsilon. In general, open rates remain strong at 22%, increasing 5.3% from Q4 2008. The average click rate was 5.9%, up slightly from 5.8% the previous year. Not surprisingly, during the high-volume holiday season, the average email volume per client increased 25.8% from Q3 2009 and was up 9.8% from Q4 2008.

Explore More Articles.

Marketing Charts Logo

Stay on the cutting edge of marketing.

Sign up for our free newsletter.

You have Successfully Subscribed!

Pin It on Pinterest

Share This