Data Driven: Print Dollars
• General Overhead: If the campaign is focused on current clients, overhead is generally added into the equation. New client acquisition campaigns or reactivation of lapsed client segments, with their lower RR% and AOV, usually cannot achieve breakeven if saddled with these costs. Because new client acquisition should be an important factor in any circulation plan, these segments are given a pass to avoid the overhead burden.
• List Rental Income: A mature print direct marketer typically turns its 12-month client file rentals 20 to 25 times annually. Any list rental income is traditionally reported at the bottom of the P&L after contribution to overhead and profit.
Identifying and benchmarking your key costs against your company’s financial plan, competitors’ results and industry averages will allow you to constantly evaluate your current market position.
Philippe Graner is director of marketing strategy at the Mission, Kan., direct marketing agency J. Schmid & Associates. He can be reached at firstname.lastname@example.org.