171 questions answered

61. How do I work out what I should spend to get a sale?

How to analyse individual sales or responses.

1. Direct marketers refer to ‘cost per thousand’ - how much does it cost you to mail a thousand people, or reach a thousand readers of a publication?
2. They analyse results by working out how many orders they get per thousand inserts, mailings or door drops, which they usually express in percentages.

They think in terms of allowable cost per order. How much can we afford to spend? This is reached by building a profit and loss account for an average sale (or response).