Working The Numbers

Working The Numbers :

In order to measure which letter is working better than the other, you’ve got to do your numbers.

And it’s not too hard. Let’s say you’re doing a lead generating letter — then the first figure you find is your cost per lead.

Here’s how to do it: Simply take all your leads and divide by your entire mailing cost (printing, postage, list rental, etc.).

For example, you paid $2,500 for the mailing to 5000 people and you get 50 people to call. That turns out to be a cost per lead of $ 50.00 ($5,000/50 = $50). Now, just like a percentage this number doesn’t really mean anything until you start comparing against other letters.

Next take all your variable expenses (printing, postage, fulfillment, etc) and multiply that by your number of leads. Maybe it costs you $6.00 for each lead for a follow-up package. So in this case it’s 50 x $6.00 = $300.00.

Take this expense and add it your letter cost ($300 + $2,500 = $2,800). Divide this number by your leads to get total cost per lead. In this example your total cost per lead is $2,800 divided by 50 leads = $56.00.

But lead cost is only your first measure of how your campaign is going. You also need to know to know how much it costs you to make a sale.

So in this example if only 10 out of the 50 prospects bought — you would have a cost per sale of $2,800 divided by 10 sales = $280.

This way you can analyze one approach against another, figuring the true cost. But don’t forget about Customer Lifetime Value.

Some companies like the music clubs and book clubs will actually lose money on their initial customer acquisition efforts.

Do you really think they make money giving away 7 CDs for a $1.00? But they’re not stupid they know that the customer lifetime value way exceeds the amount they initially spend to get that customer.

The Power of Direct Mail
Why Do not More Businesses and Practices Use Direct Mail?
The 3 Components of Successful Direct Mail
Who Are You Targeting Direct Mail?
The Secret to Selecting A Good List
What Kind of Lists Are There?
Working with Compiled Lists
Cloning Best Customers Using A Customer Survey
How to Get Survey Results?
Analyzing The Results
Working With A List Broker?
Direct Response Lists
3 Guidelines to Selecting Direct Response Lists
The Absolute Hottest List of All
The Copy and Creative
The Formula for Writing A Winning Letter
How to Create Good Direct Mail?
Headlines for Letters
What Headlines Should Do?
Headline Appeals That Last Forever
How to Make Advertising Pay?
How to Create Killer Headlines?
Tips for Better Writing
The Problem-Agitation-Solution Formula
The PS
The Irresistible Offer
Make Prospects Take Action Now
Expiration Dates Increase Response
Creating A Compelling Reason Why
Using Overlooked Assets
Holding Names Hostage in Computer
Creating Database
Segmenting Database
Birthday and Special Events
Using Preferences and Personal Details from Database
Keep Mailing Customer List with Reasons to Buy
Gathering Testimonials from Happy Customers
Bring Back Old Forgotten Customers
Getting The Message Delivered
The Secret to Double-Digit Returns
How to Use Testing for Breakthrough Marketing Results?
What Makes The Test Successful?
Understanding and Profiting from Customer Lifetime Value
How High Is High?
Testing For Maximum Results
What to Test?
Split Testing
Keep Doing What Works
How to Know What Works?
Working The Numbers
Action Steps to Maximizing Profits
The Power of Endorsements and Joint Ventures
Think about Who Has More to Gain Than You Do
Setting up The Deal
The Method to Madness
Reverse Endorse

Working The Numbers