Costo De Mkt Directo

3. Cost direct marketing campaign

Direct-mail marketing has stood the test of time to remain one of the most cost-effective advertising techniques today. Like all forms of advertising, direct-mail marketing has certain fees involved. Unlike many forms of marketing, direct-mail marketing allows you to create highly targeted campaigns that can yield a great rate of return. The key is in understanding and properly applying the economics of direct-mail marketing.

There are many ways to spend money on a direct-marketing campaign. These include your mailing list, copywriting fees,designer fees, printing, mail services and postage. Conversely, there’s only one way to make money: Turn your list of prospects into a list of customers. Naturally, the bottom line when it comes to direct-mail marketing is running a campaign that makes more money than it spends.

For new businesses, it can be difficult to estimate the rate of return. Since you don’t have previous campaigns to use as a measuring stick, you’ll have to rely on estimates when budgeting. So how do you calculate your return on investment? Here’s the formula:

(Number of Mailed Pieces x Response Rate x Conversion Rate x Average Sales Price) – Campaign Cost)/Campaign Cost = ROI

So what does all this mean? Here’s the breakdown:

• Number of Mailed Pieces = How many mailers you’re sending out

• Response Rate = The percentage of people who respond to the mailers

• Conversion Rate = The percentage of people who make a purchase, based on the Response Rate and not the Number of Mailed Pieces

• Average Sales Price = How much, on average, each customer spends as a result of the campaign

• Campaign Cost = The total spent to develop and deliver your campaign, including your mailing list, special offers, printing, mailing services, postage, design and copywriting

• ROI = Return on Investment (your percentage of return)

Let’s say, for instance, you’re marketing a new widget that you sell for $100. You decide you want to send a postcarddirect mailer and purchase a targeted consumer mailing list for $500. Next, you hire a copywriter and a designer at $300 apiece. Finally, you order 10,000 pieces printed, addressed and mailed for $3,500. Your total Campaign Cost is $4,600. Now, let’s say you get a Response Rate of 2 percent and a Conversion Rate of 50 percent. Let’s calculate the ROI:

(10,000 x .02 x .50 x $100) – $4,600)/$4,600 = 117 percent

To determine the monetary return, multiply your Campaign Cost by your ROI (in this case, 4,600 x 15 percent = $782). This means that a 100 percent ROI is your break-even point; you’ve neither spent money nor made money on the campaign. A ROI of 117 percent means that you made 100 percent of your investment back plus an additional 17 percent. The additional 17 percent is your estimated profit.

In this scenario,

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