Data Analytics: Response Analysis
We continue our series on Data Analytics with a more in depth look at Response Analysis:
What is a response analysis?
- Response analysis creates a line of sight into the overall performance of marketing initiatives, and allows you to compare different campaigns using standard metrics.
- Response analysis tells you how different market segments respond to your marketing campaigns.
How does a response analysis create this line of sight?
- Response analysis is a useful tool in comparing the performance of messaging, offers, target audience, timing, and when distance to store is a segmentation attribute.
- Response analysis tracks the performance of initiatives through key metrics:
- Response rate– Measures the responsiveness of a target audience to an offer. Tells you how attractive an offer is, and whether the right audience is being targeted.
- Average sale– Measures the average amount spent by those who respond to an offer.
- Advertising to sales ratio– Measures the amount of dollars spent on an offer versus the amount of sales generated.
- Percent of sales– Identifies what percent of the sales in the response period was linked to a campaign.
- Sales per mailing– Measures how much revenue is generated per piece mailed.
- Campaign run-out– Measures the length of time that an offer is effective in provoking a response, and helps identify the ideal frequency of these offering.
What are the key concepts involved in developing and creating a response analysis?
- Using Impact’s data cleansing and address standardization software, we’re able to accurately join mailing list data to response data. This allows for tracking when and where offerings were made, what they were, who they went to, who responded to those offering, when and where their response occurred, and what their response was.
- “Test. Test. Test.” Response analysis allows you to track the results of various marketing tests. It allows you to answer questions such as: “What message worked best? Who was attracted to the offer? What segment spent the most money? What store location performs the best?”
What is needed to do a response analysis?
- Mailing list data (including name, address, effective dates, and segment).
- Response data (including name, address, date, sale information, and location).
- The greater the detail and accuracy of the mailing list and response data, the more granular and insightful the response analysis can be.
How can I utilize a completed response analysis?
- The insight gained from a response analysis will allow you to achieve the greatest return on your marketing dollars. You can invest more in offerings that have proven to be successful, and you can recognize offerings that are not generating sufficient returns.
- Testing allows you to identify offers that are most likely to achieve high results.