Tracking the Results of a Direct Mail Campaign

thePoint
July 1, 2005

Credit union managers often say about their direct mail efforts, "I think we were busier during the promotion, but we're not sure exactly where the response came from." In the rush to get a mailing out, followed by the push to handle responses, marketers often overlook tracking. This doesn't need to happen. With proper tracking, direct mail is highly accountable.

Tracking results of a direct-mail campaign not only reveals your return on investment, but also yields information that can help with future promotions: Which lists perform best? Which offers? Which mailing formats? And more.

Tracking can take different forms. In some ways, large promotions in the largest credit unions can be relatively straightforward. That's because their highly automated front-end processes of ordering lists, coordinating test cells, and coding the responses are done by computers, perhaps also with more staff devoted to capturing results. The front-end set-up ensures better analysis later.

But there are still ways to track smaller promotions.

First, for most promotions, it's important to try to capture "front-end" data. For example, in a loan promotion, how many inquired about the offer compared to the back-end response (members who ended up taking a loan)? In between are the numbers of people who did or did not apply, and the number who was or were not approved.

In another example, the conversion ratio—the number of inquiries to the number of booked loans—can reveal significant weaknesses in either the credit union's sales or approval process. If 400 people inquired about the loan offer but only 200 applied and only 100 were approved, we would want to identify the cause for the gap. Was there adequate and timely follow-up with them? Was the application confusing?

And, if only half of the applicants were approved, why? Was the underwriting too stringent, or were we slow in processing? Or, did the mail list include too many who were not qualified?

There are several things you can do to track your mailings at a basic level. Try giving all member-contact staff a log to track inquiries related to the promotion. It can be as basic as noting on a spreadsheet the member name, date, address, and an indication of specifically what their inquiry was. The data may not be perfect, but it's a start.

For measuring results by product line, if you aren't able to separate the members who came specifically in response to the mailer versus those who just happened to open an account during the promotion, you can use historical data. For example, if the number of members using home-equity lines of credit typically increases by 1% per month, and you increase by 2% or 3% in a month during the promotion, you at least have a rough guide to its success.

Accurate data is always preferable to rough data, but perfect data is not always obtainable. Once you start with even the most basic tracking methods, you can evolve into more accurate systems over time.

With the data, you'll find your mailings become even more effective, and senior management more willing to commit funds for future promotions.

This article was prepared by the staff at the Point for Credit Union Research and Advice and is published online at http://thepoint.cuna.org/. Reprinted with permission.