Question

Topic: Research/Metrics

Interview Test - Direct Mail Analytics?

Posted by L4mg on 8/5/2008 at 4:39 PM ET 125 Points
Hi,

I was told that I may be given a direct mail test as part of an interview for a job.

What kind of formulas / analytics should I know?

I'm so used to using programs and online calculators, what "formulas" should I brush up on and memorize?

This would be offline traditional direct mail.

Thank you.
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RESPONSES

  • Posted on 8/5/2008 at 6:24 PM Accepted
    The three primary calculations you need to make are:

    1) the cost per acquisition (how much it cost you to get each sale)

    Cost of mailing ÷ # of sales you got


    2) the cost per piece (how much it cost to produce and mail your marketing materials)

    Cost of mailing ÷ # of pieces sent

    3) the response rate (how many orders you got)

    Number of pieces sent ÷ # of responses received

    Jodi


  • Posted on 8/5/2008 at 10:03 PM Member
    I also suggest you look at the website for the Direct Marketing Association:

    https://www.the-dma.org/index.php

    They may have some additional ideas, and you may also be able to get some solid metrics to present as well as how they might apply to the specific industry in which you are interviewing.

    Good luck!!
  • Posted by steven.alker on 8/6/2008 at 4:47 AM Member
    One of the most powerful tools for direct mail where the mailing exceeds about 40,000 items is RFM cellular analysis. Recency is how long ago a person contacted you, Frequency is how often and Monetary is an aggregate of what they spent over the time period.

    Cellular analysis allows you to break down your mailing list into quintiles of profitability and within each quintile, it allows you to select the prospects with the greatest probability of responding positively. It is a powerful tool and when compared to a scatter-gun approach or even a niche sectored approach, your bang-for-bucks can be an order of magnitude better (That is ten times if you are not a scientist!)

    Understanding how the 3 digit codes this technique work is neatly explained in https://www.dbmarketing.com/articles/Art149.htm

    And is covered in a downloadable paper from the aforementioned DMA of America.

    Oh, and swot up on CRM for direct marketing – see www.cutomerthink.com and search the library of my old pal, Bob Thompson’s CRM site. It used to be known as CRM Guru.

    Direct marketing is more of a science than most marketing and once you have access to good relevant copy and pictures with a decent layout, it is your use of statistics and statistical techniques which will determine your level of success. If your primary skill is in copywriting, graphics, layout and the other arty things, then a crash course in business statistics and direct marketing analysis is in order. It’s not PhD stuff, but needs maths up to about high school grade if you want to make your own models. Stats for dummies is also a useful crib book, but the DBMarketing and DMA sites are littered with excellent papers.



    Best wishes

    Steve Alker
    Xspirt, your partner in the harder sums marketing throws at you!
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