Smart advertising |e-commerce

Archive for July, 2010

How To Calculate The Risks And Rewards Of A Direct Mail Campaign

If you’re looking for a simplistic method to calculate the risks and rewards of a direct mail campaign follow these steps to arrive at premailing analysis and projections. The same formulas can be applied whether you’re in the businesstobusiness arena businesstoconsumer or if you’re a fundraiser.

By the time you’ve finished this exercise you’ll be able to:
Project response rates needed to breakeven
Project the number of new customers needed to break even
Project response rates needed to generate income
Project the number of new customers needed to generate income

Let’s begin by assuming youre a businesstobusiness marketer and you have a product or service to offer. Your goals are simple to acquire new leads for your sales force and to generate 500000 income.

Your product prices and margins will vary from my example but all you have to do is swap your numbers with mine to arrive at a solution that is accurate for you.
Our example will use the following sales information
Average firsttime sale of your product is 1000
Cost to produce your product is 600 therefore your net income on each sale is 400 40 of the total income.
Your history with newly acquired customers has shown that they remain as buyers for 35 purchases over a 2year period thereby making the total income of a newly acquired customer somewhere between 3000 5000. The net income then falls between 1200 2000 per newly acquired customer.

Since your product falls into a highvalue category your typical sales approach has been to offer value and to instill confidence in your product. To insure that your direct mail gets noticed you want a campaign that stands out among the mediocre. Were also assuming that youve done your homework on list acquisition. If thats true its pretty easy to determine that the creative approach is the remaining area that will propel your campaign and get it noticed.

For our example we’re going to mail the same 10000 names and addresses three times. The repetition helps recipients notice your mailer and familiarizes them with your presence in the market.

Step 1 Calculate the costs of the mailing
Expense categories for your mailer:
Creative design and writing 7500
List 1750
Printing 30000 each:
9 x 12 outer envelope
Large full color 6panel brochure sized at 81/2 x 11 when folded
Letterhead
Reply card
Total cost of printing = 15000
Lettershop/Mailing merge list with personalized lasered letter insert seal and meter 9000
Postage Standard rate .32 each total 9600

Total cost for the 3 mailings of 10000 pieces = 42850

Step 2 Calculate your income
Weve stated above that a newly acquired customer will make a firsttime purchase of your product at 1000 and that newly acquired customers usually buy up to 5 times within a 2year period. To be conservative well assume 3 total purchases totaling 3000.

Your cost to produce the 3000 product is 1800 600 for each 1000 purchase
Net income per new customer acquired is 3000 1800 = 1200

Step 3 Project the number of new customers needed to break even
Divide the Total cost of the mailing 42850 by the Net Income 1200 = 35.7

With our example you need 35.7 new customers to break even over a 2year period. The breakeven covers the cost of the product and all costs related to the mailing.
Here are a few calculations that prove the numbers to be accurate:

Total Income
35.7 new customers buy 3000 worth of your product
35.7 x 3000 = 107125

Net Income
Calculated as 40 of Total Income
107100 x 40 = 42850

The cost of the mailing is equal to the net income therefore at 35.7 new customers you break even but who wants to break even? Especially if it takes 2 years!

Step 4 Project the number of new customers needed to generate 500000 income
This is the easy part. Once youve acquired 35.7 customers youve covered your expenses. Looking forward for each additional customer gained using our formula and your sales history your income will be 3000.

To reach the 500000 goal youll need a total of 166 new customers calculated as follows:
500000 divided by 3000 = 166.6

Response Rates
Of course everyone who responds to your mailing wont become a customer. If you can turn half of the responders of your mailing into buyers youll need 333 responses. That calculates to a 3.33 response rate:
333 responders divided by 10000 total number of people mailed = 3.33

For this example I used conservative numbers. I also used somewhat high expenses for the development printing and mailing costs. Of course your actual numbers will be different but its relatively easy to swap your actual costs product prices with mine to get more accurate results.

About the writer:nbsp;nbsp;Dan ODonnell is Creative Director of Direct Axis a graphic design studio specializing in design for direct mail nonprofit and education markets.
www.directaxis.net
danodirectaxis.net

Online Advertising: Taking The Clutter Of Traditional Advertising Out Of Daily Life

As a staff writer at ‘Home Based Business’ we regularly answer questions submitted by our members one great topic is online advertising.

More and more traditional advertising is losing its luster to companies all over the globe. Online advertising continues to grow removing other ads from areas of everyday life; television print media billboards and radios. Companies have several reasons for changing their ad campaigns from typical to electronic. It is a phenomenon that will continue to grow depending upon how people treat both advertisements and the Internet in future years.

People are spending more time on the Internet every day which is one of the reasons companies have decided to put more time and money into online ads than traditional advertising. After all who is going to see an ad for Pepsi Cola on television if people are too busy checking email and watching videos online? People can do virtually anything online; go shopping talk to other people send letters look for a job play games do research listen to music and even watch favorite televisions shows if one knows where to look. The Internet has offered people an entirely new world and they wish to see and enjoy it.

Companies have begun to realize that more often than not people are bound to bump into their products online as opposed to seeing it elsewhere. In every day life people can easily skip ads by turning off the television ignoring them in magazines and newspapers and switching to another station on the radio. But online they are there on the same page people are looking at possibly leading to an accidental clickthrough here and there. With so many people online spotting an ad they may decide to click more money is earned than through traditional means. A person can see an ad go to the companys website buy a product and be on their way in a matter of minutes. Traditional tends to imply people must see the ad get into their cars drive to the store and buy the product. Not as fast or easy.

More perks of online advertising opposed to traditional means include the ability of companies to tailor and track ads that consumers see. A company may never be sure of how many people are seeing or hearing their ads otherwise but website hits and clickthroughs make for fast and simple numbers that companies can use. The ability to tailor ads can mean more sales. Showing hundreds of people an ad for a bookstore may not have very many results but if the company can formulate ads that show 20 people ads for mystery books 20 people ads for historical books 20 people ads for cookbooks and so on they are more likely to have hit on the correct people for that specific type of book. This catches a persons particular interest more and can lead them to the site and the sale.

Internet advertisements are also much cheaper allowing companies lower entrylevel fees and less spending overall. With a large budget and low fees a company could easily create twice the amount of ads it would otherwise. This gives them a wider range on the Internet allowing for more people to see the ads and eventually leading to more sales. The Internet is global so a company that can spread the word of its product far and wide has expanded its chances for making money.

Some companies are even using their dollars to lead people away from traditional media and onto the Internet. Superbowl commercials recently began to utilize their power to advertise company websites such as CareerBuilder.com. Some companies advertise radical videos that do not allow you to see the end unless you visit a site as Mitsubishis brief SeeWhatHappens.com ad campaign which earned them a staggering 11 million hits during the 6 hours after the ad was shown. Recently with the release of Windows Vista they utilized odd ads during a Comedy Central comic presentation that lead people to different sites IAP.org and Clearification.com but always referred back to the main Windows Vista site.

While all these perks do not mean that traditional advertising will eventually disappear everyone always looks forward to the new Superbowl ads it does mean that more advertising may crop up online. However with new ad formulations such as Googles AdSense which are textbased ads that look similar to search results and have been gaining in popularity people may not have to worry about a sudden increase in annoying popups or obnoxious banner ads. As long as people continue to use the Internet for their daily lives companies will continue to put more money into online advertising to snag that extra sale.

The staff at www.homebasedbusiness.com regularly updates the ‘Home Based Business’ website with new information on the up and coming work at home jobs and other Internet based home businesses opportunities.

About the writer:nbsp;nbsp;Bill Scott Webmaster Homebasedbusiness.com Features Home Based Business and Internet Business Opportunities. It’s like a Myspace for entrepreneurs.

How To Start Your Internet Biz In Seven Days Using Reseller Packages

This article will give you some ideas how to get started with your new internet business in just about 7 days using reseller right products. My friend Keith did it. He managed to get a dirt cheap reseller rights package for 47 and sold more than 15000 of these same products applying some simple tricks.

Now the awful part of this tale is this. I have an undergraduate degree in engineering and an MBA I can cheer about. Keith was barely able to get a high school diploma. When it came to making money however Keith was brilliant and I was the village idiot. You will learn the same secrets that Keith used and copy them to gain unlimited internet marketing success.

Step 1 Find a Niche Market For Something You Want To Do

The Chinese proverb says “A Journey Of A Thousand Miles Begins With A Single Step.” How true is that proverb! No wonder the Chinese are doing so well on the internet. Do you like trains? Trains ands model railroading might be your thing. How about gold prospecting? My friend Dave age 75 did it just for kicks. He and his wife just returned from a vacation in Austria and the Czech Republic. How about training dogs? The family mutt can help you there.

How many grains of sand are there on the beach? That’s how many niche markets there are. Just pick one and go with it.

Step 2 Select a Quality Resell Rights Package And Run With It.

Quality is extremely important if you want to gain recognition on the web. You can hunt for quality resell rights products on Google. Let us assume that your niche is gold prospecting You can search for…

goldprospectingresellrights

Enter this keyword on Google. You will get hundreds if not thousands of results giving you some resell rights packages relating to panning for gold. This will definitely blow your mind. You will also find very quickly that Google is not a lady. Google will return everything it sees on gold prospecting including stuff related to mining gold on the internet. This has nothing to do with the precious yellow metal but the keywords pick up everything.

Step 3 Create A Package of Your Own.

Select a few quality resell right products. Jumble them up and create a unique package of your own. Give a name to your package. If your name is Bob that’s me you can call your package something like “Bob’s Training Institute For Gold Prospecting.”

You can add your own services to your package that no one provides. This will make your package sell like hot cakes. Creating unique packages will distinguish your product from the crowd selling the same resell rights package.

Step 4 Add Quality Bonus.

You can create killer reports videos or add more quality resell right products as bonuses.
Adding your own bonus will increase perceived value of the package.

Step 5 Create Killer Website Copy and Graphics.

Do not copy the same website copy as given by the resell rights package. Read the copy remove benefits out of it and write your own copy. The same goes for website graphics. Do not use the graphics provided to you by the resell rights package. Instead design your own website and create your own graphics to differentiate yourself from the crowd.

Step 6 Create An Effective Follow Up System.

You should have an effective follow up system. This can be a free ebook ecourse report or a video. Create a landing page and give your visitors this free gift once they subscribe to your list.

Your follow up system should provide quality information and sell your package too. Having this kind of follow up system in place will boost up your sales.

Step 7 Get Traffic to Your Landing Page.

Start getting traffic to your landing page. Write articles participate in discussion forums create a blog create search engine optimized content sites get involved in pay per click search engines place ezine ads and do everything you can to attract traffic.

Once your subscriber signs up in your list your follow up system will automatically promote your package and make sales.

Step 8 Generate Weekly Newsletters.

Make sure you blast weekly newsletters to your list that contains quality articles. Also make sure you promote your package as well as your affiliate products to make cool money in return.

Step 9 Link Exchange

Do not overlook setting up link exchanges from your website to other sites. They would love to promote gold prospecting that you might offer in return for you promoting picks and shovels. That’s an example of setting up a mutual link. You help growing the other fellow’s business and he will help you grow yours. It sounds like a fair exchange to me.

About the writer:nbsp;nbsp;Bob Carper is a veteran consultant in information systems He holds a a MBA from Pitt. For additional information go tohttp://www.securewebconference.citymax.com. His blogsite is http://www.htmlsecrets.net/blog. You may also contact him at robertcarper06comcastnet