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How Does Direct Response Marketing Work?

Unlike other forms of marketing, direct response marketing is directly tied to revenue. This form of marketing is entirely based on data. Here's how it works:

First, you establish benchmarks for your business. You analyze historic key variables on a monthly or weekly basis like the number of orders, the average order frequency (the number of times someone orders in any given time period), the average order value (the average price of each order for the selected time period), gross revenue and net revenue.

Then, if you've done any advertising in the past, you look at how that advertising performed. Typical metrics to review are spend by channel (how much you spent on advertising for each specific marketing channel for the given period), number of leads or orders directly tied to the advertising, the cost per lead or order, and the ROAS (return on ad spend). If your systems are set up properly, this information is available for Shopify, Square, Toast, Tock, BentoBox, etc.

Finally, you optimize your marketing (test new creative and targeting and continually update base on results) until your ROAS (return on ad spend) is where you want it to be. Once you are comfortable with your ROAS, you can increase your marketing budget at small increments and begin to scale your business profitably.

Restaurants, bars and cafes that are doing this right, are more profitable than ever during these COVID times.

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