M2 Raising Marketing To A Higher Power

Michael Paladini

In this article the author argues that evaluating direct marketing activity simply by looking at response rates is inadequate - the real question is 'how much profit does the activity generate'.

M2 Raising Marketing to a Higher Power

Achieving greater efficiency and effectiveness

Michael PaladiniBerenson, Isham & Partners, Inc.

As it's often practiced, direct marketing focuses on response and conversion rates: 'how many inquire and how many buy.' But current 'value equation' thinking has moved direct marketing's best practitioners from sole focus on those two rates to: 'How much money does our effort generate?' and, even better: 'How much profit does our company make?' The answers to these questions start in response rates, but weigh those rates against a full range of cost and revenue factors. At my firm, we...

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