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Re-evaluate for true ROI

RE-EVALUATE FOR YOUR TRUE RETURN-ON-INVESTMENT

by W. Tom Kowalczuk
July 28, 2016

Return On Investment Blog Image

A marketing ROI of 1,168% would be incredible! When do you evaluate whether an advertising investment was worth the cost of the venture?

Mailing campaigns are known to have an extremely low response. Normally, it’s 1 or 2%. Despite this, financial institutions, automotive dealerships, and many others continue to use the US Postal Service to advertise. This is not an article to promote that form of promoting your brand but a question of when you measure success or failure.

Looking at a mailing campaign that we did years ago is an example that gives food for thought. It was a small postcard mailing that cost approximately $500. After two months we had only realized a quarter of one percent response. The resulting sale was approximately $165.00 which means we did not even come close to having a profitable ‘return-on-investment’.

That was just a few years ago. Today as we go back and re-evaluate that questionable investment, the picture drastically changes. That prospect turned into a very supportive customer purchasing products and services numerous times which has given us a ROI of 1168%. We’ll let you decide. In the long-term was the full-color postcard mailing a good investment?

What is your average sale? This is important when evaluating your desire to increase sales through advertising. For example, when you purchased a business card to prospect for new customers, was your focus based on shopping for something cheap ending up with a card similar to your competitors? The dollar difference between that and a card setting you apart from the competition is usually very little.

Within a stack of 500 business cards how many actual sales are there? Multiply that times your average sale and this will put your decision into prospective. If the ratio is 2 out of 500, your average sale is a conservative $100 and the card cost only 20 cents each, then your ROI is high. Add subsequent sales and ROI will sky-rocket. The sooner you go through those 500 cards, the faster you put those $$$ in the bank.

As a side note, take every opportunity to give out the cheapest form of marketing material at your finger-tips. The ROI will far exceed your marketing costs. With every mailing whether an invoice, product information, or a ‘Thank You’ card, we include our business card. Our prospecting is based on having satisfied customers retain our card and/or giving it to a business associate.

Increase ROI by giving everybody your business card. If not in need of the products you sell or services you provide… they may know somebody that does. Full-color solutions may be your answer to increased sales and the promotion of your brand.


Copyright © 2016 W. Tom Kowalczuk. All rights reserved.

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