Direct Marketing – Work in These Four Areas to Lift Profitability

Direct marketing is based on data about individual customer responses and transactions which are used to target, execute and control marketing actions meant to start and develop profitable customer relationship in the short-term as well as the long-term. The strength of direct marketing is that its profitability is easy to measure compared to mass consumer approach to marketing. Since this is so, it’s necessary to pay attention to the factors that impact that bottom line result.

Here we’ll look at four of those factors that affect the profitability of direct marketing operations.

1. Objective. The objective of the project must be clearly stated in SMART (Specific, Measurable, Achievable, Realistic) terms. Common areas for objectives include customer acquisition, customer retention and winning back old customers. Customer acquisition is more costly than the others.

2. Life Time Value of the Customer. This is a calculation of what a customer in a category will contribute to profit and overheads during their “lifetime”, that is, while they remain a customer. This measure is affected by customer retention rate and inflation. It’s used for deciding how much to spend on a customer and to assess the best sources of customers. If you increase retention rate, then LTV will increase assuming price does not fall, which is unlikely. If for any reason inflation rate drops, then LTV will increase also, all things being equal.

3. Return on Investment. There are several ways of computing this statistic. The simplest method is the sales value method, in which you divide the sales value by the marketing cost. This measure is useful because it focuses on two main drivers of the amount of profit. There are three ways to increase ROI. One is to raise sales value and keep marketing cost the same. Two, bring down marketing cost and maintain sales value. Three, increase sales value proportionally more than marketing cost.

4. Allowable Marketing Cost. This measure is meant to inject discipline into the cost of marketing. It sets the upper limit to what you can spend to acquire new customers. Going above it, and I guarantee you will not be loved, because it means erosion of the desired profit unless, of course, product cost and distribution cost some how fall. It’s arrived at by netting out cost of goods, distribution cost and desired profit from sales value (All per unit).

Having set the objective in the area of interest, the profitability of a direct marketing campaign depends on the key efficiency measures of life time value of customer, return on investment and marketing cost management. These concepts are also useful even if you are doing business online.

Using Direct Marketing Companies

Direct marketing is a type of advertising that avoids the traditional mediums of television, radio, magazines, newspapers, billboards as such like. Instead direct marketing, as the name suggest, goes directly to the customer by some sort of mail, be it fliers, leaflets, catalogues or indeed email. Direct marketing is a sub-type of marketing and its core principle is the same. The core principle is simply advertising ones goods or services to a hopefully responsive audience. The idea behind of this is being able to better define that audience according to the product or service you are selling and the type of customer that will be responsive.There are a whole host of direct marketing companies that you can approach to purchase lists of people, which have been identified as prospective clients, and customers to your businesses particular industry. They may have been identified as prospective clients by there previous purchases or by their known interest in a certain subject, perhaps by visiting or signing up to websites and promotions etc. A good direct marketing company will have names, addresses, phone numbers and email addresses for a large list of people that are interested in the products and/or services your business is offering and have indicated they are willing to be contacted, or receive promotional material from third party companies. The strong advantage of this and gone over general advertising such as TV adverts, is the relatively low cost and the much higher conversion rate. The conversion rate will never be 100% or even close to it, but it go through good lists, will increase your conversion considerably. For more info on direct mail business check out offline arbitrage review.

Ways to Save Money When Buying Tyres for Your Vehicle

Choosing the right vehicle, motorcycle or three-wheel tyres in Sri Lanka can be a difficult task. You want to make sure that you are getting a tyre that is in good condition and will last, but also at an affordable price so you don’t spend more than you need to. There are ways to do this.

Tyres can be quite an expensive accessory when they need replacing, and it is important to make sure you get your money’s worth when buying them. If you look at motorcycle tyre prices in Sri Lanka, you will notice that they can be quite on the high side.

One of the most common ways to save money when buying tyres for your vehicle is choosing second hand options. These can be found online or in a garage, and can cost anywhere from 20-50% less than brand new ones, which will really add up over time. If there are some minor marks on a tyre then this won’t have too much impact on how they perform, so going with slightly older models that have been used before doesn’t mean they’re not safe anymore. It also means that if something does happen while you’ve got these tyres fitted (like a puncture) it’s easier to find replacement parts as people choose old styles rather than new ones in order to save money.

Some tyre suppliers also have special offers on occasion which you can make the most of to save money. These sorts of deals are usually for limited time periods, however, so you will need to act fast. The easiest way is just asking the supplier what they’re offering at the moment, or if there’s a particular tyre model that comes with some sort of discount (which will depend on your car make and size) then this can be worth buying too.