Informed Delivery – The ROI Story You Need to Tell Your Customers
June 13, 2023   Dave Lewis

Just like you, we’re all atingle about the Informed Delivery promotion coming in August. Everybody loves postage discounts! But surely there must be some other value to Informed Delivery. There must be more than a discount. There is… much more.

In preparing for my National Postal Forum presentation on how mail service providers can participate and profit, I put together a hypothetical direct mailing scenario. I’ve run it by some direct marketers I know, and they agree the reasoning is sound – if not conservative.

Here’s my hypothetical campaign:

  • The offer has a value of $50. The “thing” being sold.
  • The expected response rate is 2.5%.
  • That would generate 25 responses per 1,000 pieces mailed.
  • At $50 a pop, which works out to $1,250 in sales per 1,000 pieces mailed.

This is oversimplified, of course. I didn’t consider lifetime-value and a lot of other factors, but it’s still a reasonable campaign expectation. Now, let’s add Informed Delivery:

  • Based on today’s ID numbers, we would expect 200 additional impressions per 1,000 pieces.
  • 200 impressions must have some impact. Let’s say it adds 2%, which adds .5 additional responses per thousand. Now the response rate is 2.55%.
  • That additional half response is worth $25. ($50 offer value x .5)
  • There is also a ride-along ad that some consumers will click. Let’s say one in 1,000.
  • Not all clicks are sales, of course, so let’s use a 10% conversion rate. This yields an additional .1 response per 1,000 pieces.
  • That .1 response is worth $5.
  • Add together the response gained from additional impressions and clicks and you get an added response of $30 per thousand pieces.

Let me repeat that – you are adding $30 in value to every thousand pieces just by adding an Informed Delivery campaign. Don’t like my numbers? Have your customers fill in their own. They know what a response is worth.

Think you can charge for adding and monitoring a campaign? You can. You should.

Join me on my June 15 webinar when we can dig a little deeper.