First you set a budget that balances your resources and your objectives for your marketing campaign. After the campaign you need to know exactly how it did in terms of costs and responses. This info is essential to help you quantify the value of your marketing efforts.
The numbers game
After working out your strategy and after you are happy with your creativity it is time to work out the total cost of your campaign. This calculation should include any creative fees, printing costs, The cost of purchasing a list (if you need one) and also the cost of postage and packing. Divide your total campaign costs with the total amount of items to be mailed to work out the cost per piece. After your campaign has run its course you should figure out the response rate, This figure will help you know if you are mailing out enough pieces to cover your costs. The reponse rate is worked out by dividing the number of responses by the total quantity of pieces mailed x 100. This is the response rate. To work out the all important break-even point: (campaign costs) ÷ (average sale – cost of goods sold) = number of sales needed to break-even.