Understanding ROI in EDDM Campaigns: A Comprehensive Guide

Every Door Direct Mail (EDDM) is a powerful tool for businesses looking to maximize their marketing impact and reach their local audience efficiently. It’s an easy way to precisely target specific neighborhoods or zip codes, ensuring that your marketing materials reach the right audience.

While some consider mail to be an outdated marketing channel, EDDM is proven to be highly effective, boasting one of the most consistent returns across all marketing methods.

In fact, its ROI rivals that of social media and even surpasses paid search and online display ads. A 2017 marketing study analyzed the effectiveness of various advertising channels found these ROI figures per channel:

• Email: 124%
• Social media: 30%
• Direct mail: 29%
• Paid search: 23%
• Online display: 16%

This might seem surprising at first, but the Direct Marketing Association also found that 73% of consumers prefer direct mail to other forms of marketing, and 76% trust direct mail, compared to only 43% for social media ads and just 25% for online pop-up ads.

Want to understand how impactful an EDDM campaign can be for your business? Let’s explore a detailed use case of an EDDM campaign and the ROI you can expect from your efforts.

What is ROI?

In marketing, ROI, or return on investment, is simply your net profit divided by the total campaign cost.

The formula is straightforward: ROI (%) = (Profit – Campaign cost) / Campaign cost x 100%.

Take this example: Say you send 2,000 postcards costing $600, and 4 respondents make purchases totaling $1,000. In this case, your ROI would be 66%, generating a net profit of $400 despite a low response rate. 

Planning an Effective EDDM Campaign

Before diving into the specifics, let’s outline a basic strategy for an EDDM campaign. Here are the five basic steps you’ll need to follow to set your campaign up for success:

Define Your Goals: What do you hope to achieve with this campaign? Is it brand awareness, promoting a new product, or driving traffic to your store? Make sure your goals are clearly identified. 

Identify Your Target Audience: Use Oppizi’s route selector tool to select USPS postal routes that align with your desired demographics.

Design Your Mail Pieces: Design EDDM mail pieces that are compelling and visually appealing.

Print and Prepare: Choose a reputable printing service and prepare your mail for distribution.

Track and Measure Results: Use trackable elements to gauge the campaign’s effectiveness.

Estimating Your EDDM Budget 

Let’s say you have a budget of $5000, and you want to execute a comprehensive EDDM campaign that generates substantial leads and offers a high return on investment (ROI). Our handy EDDM cost calculator makes it easy to get an estimate of your campaign cost depending on how many postcards you want to send. 

By partnering with Oppizi, you’ll be able to design, print, mail, and measure approximately 15,250 standard-size postcards or 13,800-jumbo size postcards with your $5,000 budget.

In this case, your cost per postcard is approximately $0.32 per piece. 

Standard Size Postcards: 15,250 x $0.32 = $4,880

This allows you to stay well within your $5000 budget, leaving room for additional marketing efforts or contingencies.

Expected ROI and Lead Generation

The effectiveness of your EDDM campaign hinges on several factors, including design, messaging, and targeting. Here’s a look at the response rate and conversion rate you can expect from a campaign of this size.

 1. Response Rate and Leads

Industry response rates for direct mail campaigns typically range from .05% to 2%. Assuming a response rate of 2%, you can expect approximately 250 leads with a budget of $5,000.

15,250 standard size postcards x 0.02 response rate = 250 leads 

However, with an effective design and targeted messaging, it’s possible to achieve higher response rates, potentially reaching up to 5%.

 2. Conversions 

To calculate conversion rate, you can use this simple formula: Conversion rate = (Total conversions / Total visitors) x 100.

Assuming a conversion rate of 5% for the leads generated, you can expect about 12 conversions.

250 leads x 0.05 conversion rate = 12.5 conversions

 3. Average Order Value (AOV)

Finally, let’s say your average order value is $500. The revenue generated from new customers would amount to a gross total of $6,250.

Standard Size Postcards: 12.5 x 500 = $6,250

4. Campaign ROI

In this example, you can expect an ROI of 25%, and a net profit of $1,250.

ROI (%) = ( (6250 – 5000) / 5000) x 100% = 25%

How to Maximize the ROI of Your EDDM Campaign

Maximizing your return on investment for an EDDM campaign involves strategic planning, targeting, and execution. By following these key steps, you can enhance the effectiveness of your campaign and ensure it delivers measurable results.

 1. Compelling Design and Offer

Invest in high-quality design and imagery, and include a compelling offer. A strong call-to-action, discounts, or limited-time offers can significantly boost response rates and create a sense of urgency.

 2. Use Targeted Messaging

Even though EDDM is designed to blanket a geographic area, your messaging should still feel personal and relevant to the recipient. Highlight unique selling points and tailor the content to address the needs and preferences of the recipients.

 3. Include Trackable Elements Like a QR Code

Incorporate QR codes or special discount codes to track the effectiveness of your campaign. This data will help you analyze performance and make necessary adjustments. 

When you launch an EDDM campaign with Oppizi, you can utilize our free QR code generator tool to create custom QR codes that can be added to your mailers and used to track success in real time.

 4. Follow-Up Campaigns

Consider follow-up campaigns to nurture leads who didn’t convert initially. A sequence of mailings can reinforce your message and increase the likelihood of conversion.

After the campaign, track the redemption of discount codes and QR code scans. Analyze the data to determine the response rate, conversion rate, and overall ROI. This information will guide future campaigns and help you refine your marketing strategy.

Discover the Benefits of EDDM

Regardless of the budget you’re starting off with, Every Door Direct Mail campaigns can significantly boost your local marketing efforts. With Oppizi’s advanced tracking and reporting tools, it’s easier than ever to measure and optimize the success of your EDDM campaign.

By strategically planning your campaign, targeting the right audience, and crafting compelling mail pieces, you can generate hundreds of leads and achieve a robust return on investment. 

Embrace the power of EDDM to expand your reach, drive customer engagement, and grow your business.

Ready to get started? Launch your campaign today and watch your business flourish.