The only condition is that you have to take into account every penny you spent on the campaign.Ĭost Per acquisition = Total Cost/No: of Customers Acquired Cost Per Conversion/Response
However, the calculation involved in determining the CPA is rather simple. So, if free delivery is part of the offer you are giving to the target audience, that would need to be considered for CPA. Only after doing this can you tell whether a direct mail campaign is meeting your expectations. However, as part of your direct mail campaign analysis, you need to consider the total cost, including marketing and fulfillment costs. It is always desirable to keep a low CPA for your direct mail campaigns. So, if you make the offer enticing by significantly upping the value offer, you only end up with a high CPA. When you convert the answer into a percentage value, the conversion rate in this scenario becomes 50%.Īlso Read: Direct Mail Response Rate & Mailing Costs Cost Per Acquisition (CPA)Īs the name suggests, the cost per acquisition or CPA of a direct mail campaign is the money you end up spending to acquire a customer. In this case, the conversion rate is 50/100.
Suppose 100 people responded to your direct mail, but only 50 of them made a payment for the purchase. Furthermore, there is a straightforward mathematical formula that you can use to determine the conversion rate of direct mail campaigns.Ĭonversion Rate = No: of Conversion / No: of Responses That being said, it is much more complicated if you want the prospects to actually pay for the product/service.
For example, it is relatively easy to have your prospects sign up for a free trial. However, this all depends on your definition of “conversion.” But, in most cases, the conversion is when a prospect becomes a paying customer. In fact, most marketers consider the conversion rate a better measurement of the direct mail campaign than the response rate. Direct mail campaign conversion rate is without question one of the clear indications of a mailer’s performance.
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