When using mailing lists to expand your business, it’s vital to keep track of the costs as well as revenue. By tying the cost of each promotional activity directly to its revenue, you will be able to determine the profitability of your marketing campaigns an make better decisions on how to buy mailing lists.
ROI - Return on Investment
What exactly is ROI, anyway? It is the return on investment of your advertising expenses. Are your mailing list campaigns profitable or not? How are you going to know? The only way to determine if your marketing investments are profitable is to analyze your profit vs. expenses. This is absolutely crucial. On the income side, you can use an invoice ledger to identify all sources of income by categorizing each invoice according to the source of its sales lead. Now on the flip side, you categorize your promotional expenditures according to the marketing campaigns used to generate the sales. Below is the formula for determining your ROI.
Mailing List Campaign Expenses
Calculating your mailing list expenses first begins with your list. The price of your list depends on a number of factors including zip codes, demographics, drill-down data and the type of list you are pulling consumer or resident list. Next, it is important to calculate both your stamps and envelopes, for the number of residents on your list. Finally, it is important to take your cost of production and into consideration.
Our example (on the right) looks at an estimate for a list of 500 households on a mailing list.
*The table below shows an example cost of a 500 piece mailer.
Combine Your Sales and Marketing Costs
Let’s assume that your 500 mailing list campaign brought in $1,500 of sales for the month. Then the equation would look like this:
Use this Information to Help Expand Your Business
It isn’t difficult to leverage the cost of your marketing and sales growth to determine your return on investment (ROI). Many companies use ROI to determine what marketing efforts are driving the most revenue for their company.