How do you decide what marketing venue will work for your business? The responsibility of choosing among direct mail, e-mail, social media and personal contact can be daunting. The Harvard Business Review recently published an article entitled, “Why E-mail Marketing is King” which analyzed the effectiveness of email marketing compared to direct mail. The following chart shows the results of their research:
| Grand | Count | Response | Average | $ per Name | % Sales in | % Sales |
| Total | Rate | Order Value | mailed | Store | Online | |
| Direct Mail & Email | 35,000 | 25% | $71.71 | $17.67 | 79% | 21% |
| Direct Mail Only | 35,000 | 24% | $68.62 | $16.39 | 83% | 17% |
| Email Only | 35,000 | 23% | $67.82 | $15.71 | 79% | 21% |
| Source: HBR, “Why Email Marketing is King,” 2012 | ||||||
From this chart, we see that:
| • | The email only marketing campaign averaged the lowest response rate, the lowest average order value and the lowest $ per name mailed, and was average in online sales. |
| • | The direct mail only marketing effort resulted in more in-store sales than either email only or combination direct mail and email efforts, but was lowest on $ per name mailed and average on other results. |
| • | The combination direct mail and email marketing effort garnered the largest response rate and highest average order value, but was average for other results. |
According to the chart, if you are looking for in-store sales, use direct mail. For anything else use a combination of email and direct mail marketing.
What the chart doesn’t address, however, is the ROI. Juliet Kopecky of Hubspot’s Inbound Marketing took the research and first calculated the total revenue associated with each scenario using the equation:
Total revenue = total number of prospects x response rate x average order value
She then determined the total marketing spend using the equation:
Total spend = (cost/piece of direct mail * total # of prospects) + (cost/email * total # of prospects)
And finally, she calculated the ROI using the equation:
ROI = total revenue / total spend
The results?
| Total Revenue | Total Spend | ROI | |
| Direct Mail & Email | $627,463.00 | $21,210.00 | $30 |
| Direct Mail Only | $576,408.00 | $21,000.00 | $27 |
| Email Only | $545,951.00 | $210.00 | $2,600 |
Looks like email only wins hands down on ROI
Read more about this study: http://blog.hubspot.com/blog/tabid/6307/bid/34032/An-Investigation-Into-the-ROI-of-Direct-Mail-vs-Email-Marketing-DATA.aspx#ixzz2LHnWjymo