I’ve been thinking about response rates, and you know what? I’m starting to wonder why we use them. They are in every case study. Every Webinar. Every presentation slide. Yet they don’t really tell us much of anything.
Response rates simply tell us whether the basic marketing elements of the piece are compelling enough to get people to take an initial first step. The respondent makes a phone call. They scan a QR Code. They log into a personalized URL.
If they do, great! But you can have an 80% response rate and the campaign can be a money-loser. Why? Because simply taking the initial action doesn’t necessarily translate into a purchase. If they make the call, scan the code, or log in but don’t actually make a purchase, sign up for the loyalty card, or take the other desired action, the response rate didn’t do you much good at all. That’s why we need to know conversion rates.
At the same time, you can have a high conversion rate but the campaign still loses money. Why? What is the cost to develop and execute the campaign? How much did it generate? If it costs $2.00 each to send the postcard, but each postcard only generated $1.80 in revenue, you’re going to lose money no matter how high your response rate and conversion rates are. That’s why we look at metrics like dollars per sale and ROI.
Here’s a look at some of the common metrics used in evaluating campaign success today:
- Response rate
- Conversation rate
- Cost per sale
- Revenue per sale
- Return on investment
- Lifetime customer value
There are additional metrics for online campaigns, such as open rate, click-through rate, form fill rate, and more.
Do you know which marketing metrics are most effective? Do you talk to your clients about using the right metrics to evaluate the true success of their campaigns? (For info on a brandable white paper on this topic, click here.) If not, this is a conversation you should start having . . . because knowing the response rate isn’t enough.