Looking For the Break-Even Point
The primary goal is usually making sales of services or products. But it goes beyond that – the sales must produce results that exceed the cost. Forgive this overly simplistic statement, I only state it because I have seen too many communicators who fail to start their enewsletter program with a return-on-investment objective.
Far too often, the process of getting into an enewsletter program starts with the budget. The “How much will it cost and can we afford it?” question is paramount.
Instead, the first question should be “How much sales volume must we achieve to cover the cost of the enewsletters?”
The cost of the enewsletters is the baseline. The projected sales volume will initially have to be an educated estimate. But if the program costs $10,000 a year, there has be a judgment that it is possible to sell ten of their $1,000 units as a result of leads from the enewsletter program.
This is the break-even point. Each additional unit above that becomes profit.
Now the focus has changed from “How much of our capital resources will it drain?”, to “How much profit is it likely to generate?”
This is proactive marketing. It is also marketing based on accountability. With proper tracking the marketer will know what has happened as a direct result of the program.
Prescott “Pete” Lustig
Senior Marketing Strategist