Evaluating Direct Marketing Results

Responses to direct marketing campaign may include direct sales, appointments with salespeople, and opportunities for future sales. This activity outlines a variety of responses for a direct mail campaign for an insurance company. If you were the manager for the campaign, how satisfied would you be with the following results?

 

ACTIVITY/TASK

‘Got You Covered’ insurance company sent out 1,000 direct mail letters, at a total cost $5,000 (in order to trial their direct marketing campaign). A summary of the results is as follows:

20 people indicated that they would like to see an insurance agent And 10 of these people later bought an insurance policy

20 people indicated that they were not interested at this time, but sent back their details and indicated that they would like to receive future offers

10 people indicated that they wanted to get the full details and to complete the application form. After some follow-up, 5 of these people took out the insurance

5 other people indicated that they would like some information on other products sent to them

(Note: To help you evaluate the results, the company makes $200 profit on each policy sold and the average person remains a customer for five years.)

 

QUESTIONS

1. Outline the mix of responses that the firm received from its direct marketing campaign.
2. Which of the responses received would be the most valuable to the firm? Why?
3. What was the sales conversion rate of the campaign?
4. If you were the campaign’s manager, how satisfied would you be with these results? Would you repeat the campaign?