Most Used Direct Marketing Metrics

The general rule for any marketing program is that it must generate leads and eventually sales. And businesses engaged in direct selling will utilize direct marketing metrics, which are practically the same metrics used by other businesses, to measure the effectiveness of their marketing activities. They will have cost per head, lifetime value, average, and others.

There are many methods that direct marketers can utilize to assist the sales force. The Internet has been very useful in disseminating product information and making offers. Internet advertising campaigns through e-mails are getting popular nowadays, definitely superior to the traditional distribution of leaflets, brochures, and other mediums. However, they have to compile a mailing list first. The quality of the mailing list, of course, affects response rates, just like the quality of offer, the creativity of presentation, and other factors do. The response rate as a reliable direct marketing metric is viewed by some marketers with skepticism.

Many direct marketers prefer cost per head metrics. Cost per head directly relates to sales generation. There are, however, some ongoing arguments among them on what base to use in computing the cost per head ratios for specific marketing campaigns. Should the number of generated sales leads be used or the actual sales determined to come from the qualified leads plus the leads the sales force are working on? Actually, both will do as the marketers and the sales force work for the same objective – consummate sales. There must be consistency in the application of either method, however, to avoid confusion and make results useless for predicting and monitoring trends.

Another useful direct marketing metric is inquiry-to-lead conversion ratio. In this method, initial inquiries by customers are determined whether they are qualified leads by two factors: quality of inquiry and precision of the criteria for qualification. The criteria for qualification factor judges the inquiry based on a set of criteria developed in coordination with the sales force and should prove stable over time.

The marketer will set high hopes on the first factor. The quality of inquiries can be affected by a number of things from the mail list itself to the offers made. Initial inquiries tell marketers if adjustments should be made in the marketing strategies and methods.

Leads are expected to result to sales. For marketers, this is a very crucial point of the campaign. A low rate will raise questions on the quality of leads generated by the campaign, although they can counter by saying that the problem is not with the leads, but with the sales force. This metric can help shed light on whose shoulders responsibility should fall.

Direct marketers need to establish with finality the effectiveness of the campaign. For this purpose, the expense – to – revenue is a direct marketing metric that is usually used. It has other useful uses, such as assessing campaigns against each and establishing benchmarks for future marketing activities.

Direct marketing metrics allows marketers to gauge the value of their work to the over-all business of earning profits. As if to highlight this importance, a variety of marketing metrics has been developed and surely, others will follow, but choosing just a few of them for their ability to provide the most accurate should be sufficient.