Measuring Marketing

Chapter 57 Direct Marketing Revenue Goals

Measurement Need

Ascertain how many direct marketing communications must be sent to achieve the revenue goal for a direct marketing campaign.

Solutioni

Direct mail revenue goals measure the effectiveness of the marketer’s direct marketing advertising by setting a revenue target, then determining the number of direct marketing pieces that need to be sent to achieve that target.

$DM=\frac{R_t}{S_a\times R_r\times C_r}$

Where

DM = number of direct-marketing pieces

Rt = revenue target

Sa = average sale

Rr = response rate

Cr = conversion rate

Let’s assume an online retailer sells auto supplies seeking revenue of $400,000 and its marketing team wants to know how many direct-marketing communications to send ...