Creative Corner- Mail-order Math (810 words)
I speak on the topic of creative at many different conferences because people love getting involved with the words and pictures. The real creativity, though, happens when a client gives us a budget and we figure out what we can afford to spend, and how we can get the most from this budget in direct mail, direct response ads, commercials or a Web site.
Always remember: Our business still is a numbers business. Advertising agencies can still spend money on image campaigns, but direct marketers always are accountable. We get our report card after the campaign is finished. Good luck!
What can I afford?
Follow these steps to calculate how much you can spend to acquire a customer.
- Determine your gross revenue:
• Selling price;
• Shipping and handling charges.
- Calculate all the costs to determine your "cost per order"
• Product cost;
• Order processing;
• Billing and collections;
- Calculate your breakeven allowable.
- Calculate the number of orders you'll need to break even.
- Calculate the cost per thousand.
LOIS K. GELLER, president of Mason & Geller Direct Marketing, is the author of "RESPONSE! The Complete Guide to Profitable Direct Marketing." Her new book, "Customers for Keeps," will be published Fall 2001. She can be reached at (212) 697-4477 or via e-mail at firstname.lastname@example.org.