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Your EnterQuest Bulletin - Issue 347
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| Thought for the week: Finagle's Eighth Rule: "Teamwork is essential. It allows you to blame someone else." |
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In this week's issue:
Get to grips with direct mail arithmetic
Direct mail is a numbers game, pure and simple. If the numbers work in your favour, direct mail can become a profit-generating machine. If the numbers don't work in your favour, direct mail can be a cash-draining black hole.
Here are the terms you need to know:
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Response rate. This is the number of responses you received, divided by the number of mail pieces you sent (response rate = total responses/total mailings).
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Conversion rate. This is the number of people who purchased from you as a result of your mailing.
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Return on investment (ROI). This is the amount of money you made on your mailing divided by your investment to do the mailing (ROI = net profit/total investment).
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Product price. This is the selling point.
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Product cost. This includes all variable costs (cost to acquire or manufacture product plus packaging and marketing costs).
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Overhead cost. This includes all fixed costs (such as salaries, office supplies, utilities etc).
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Break even point. This is the number of products or services you must sell to equal the amount of money invested to do the mailing (break even = overhead cost/selling price minus product cost).
And these are the rules of direct mail arithmetic you need to know:
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Rule 1: Ask yourself "What must be my conversion rate at break even, for my assumed selling price?".
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Rule 2: Only start a direct mail campaign if the most conservative conversion rate estimate results in a break even or profit. (A 1% conversion rate is considered pretty good in direct mail terms).
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Rule 3: (Caveat to rule 2) If you have a healthy back-end it may be smart to gain customers through direct mail even at a loss.
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Rule 4: Response rates mean nothing! A 1% response rate on a mailing for some products can be wildly profitable (just ask the credit card firms).
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Rule 5: ROI is everything. In the end, what counts is how much money you made on the mailing.
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The UK Small Business Marketing Bible contains hundreds more tips and tactics for boosting your sales using proven marketing strategies that work no matter what product or service you sell. |
Each week we provide you with summaries of some popular or emerging business ideas in the UK and elsewhere around the world.
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Artwork for casts on broken arms and legs. Casttoo provides people who have breaks or fractures with the means to decorate casts with tattoo-like transfers. A range of designs is available.
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Business sells baked goods by subscription. Le Dolci is a bakery that operates a 'cake club'. It makes a range of sweet products then delivers them to customers on a weekly basis. The business offers a range of subscription options, which differ depending on the number of treats a customer wants delivered.
Regularly improving your vocabulary is not just about learning a new word and its meaning. It will improve your general knowledge and make you feel and act smarter in all sorts of personal and business situations.
Do you know the meaning of the words 'unscrupulous' and 'incorrigible'?
Which word means:
'having no morals'
and which means:
'beyond correction or reform'?
Answer at the end of the Bulletin.
The following topical business issues have been recently reported in the media. Did your radar pick them up?
1) The Government has given the go-ahead for the implementation of which of the following measures designed to help small suppliers?
a) a new funding scheme for small manufacturers
b) a supermarket and grocery ombudsman
c) a new Government department for small firms
d) an overhaul of logistics and delivery legislation
2) The British Retail Consortium has reported that high street sales in December were at their strongest since 2001. But which retailers were reported as continuing to struggle?
a) clothing shops
b) toy shops
c) electrical goods shops
d) furniture and flooring shops
3) Accountancy firm BDO Stoy Hayward has recently reported that levels of which of the following increased by 76% in 2009, breaking the £2 billion barrier?
a) fraud
b) liquidation
c) tax deferrals
d) redundancy dismissal tribunal awards
Answers at the end of the Bulletin.
Find logo designers
This website can help you find a designer who can create a logo for your product or service, through a competition-style service. Simply tell the service the type of design you want, and how much you'll pay, then the service will tell the designers who've registered with it. They each design you a logo, then you pick the winner and pay them (the site will take commission from the final fee).
Search engine for Twitter users
BackTweets is a search engine that can be used to find links to Twitter from any given website. To use it you type the URL of the site you're interested in (such as your own or a competitor's) then BackTweets will search for Tweets containing links to that site.
Free white paper on search engine optimisation
If you're thinking of launching a website for your business, this free white paper provides you with an overview of the basics of search engine optimisation and how to structure web content so it gets indexed by search engines.
Internet alternative to Microsoft Office
ThinkFree is an application that can be installed over the Internet to be used online or offline, and has alternatives to popular Microsoft Office programs. It's free to download and users with Google accounts can use the service without signing up to a ThinkFree account.
You can get access to hundreds more online business tools, how-to articles, checklists, standard forms and business development resources by subscribing to the Better Business Adviser.
Win a Bluetooth mobile printer worth £199
The PrintStik from mobile working solutions firm PlanOn is the world's smallest full-page printer that makes it possible for users to print documents anywhere, any time, while on the road.
PrintStik offers full-feature printing capabilities on a self-contained, 20-page roll of A4 paper. It is extremely user-friendly and syncs easily with a variety of devices including laptops, PDAs and smart phones, transferring images and documents clearly with no smudging or bleeding.
EnterQuest has teamed up with PlanOn to offer readers the chance to win this really useful device, worth £199.
To be in with a chance of winning this great prize, just answer the following question:
Q: An ombudsman is to come into effect in February 2010 for which of the following retail sectors?
a) grocery
b) entertainment
E-mail your answer, together with your name, address and daytime phone number, using 'PlanOn PrintStik competition' in the subject line, to enterquest@cobwebinfo.com.
All entries must be received by 31 January. Full competition rules are available on request.
This book is aimed at those who want to start their own shop-based retail business. It covers important topics such as location, sourcing finance, stock selection, and store display. It also includes insights, hints and tips from shop owners. Check out:
Just one word answer
Unscrupulous means 'having no morals'.
The unscrupulous actions of the trainee led the employer to dismiss them.
Incorrigible means 'beyond correction or reform'.
Despite some perceptions that the former criminal was incorrigible, the trust approved their application for a start up grant. |
How's your business radar? The answers
1) The answer is b) - The Government has finally given the go-ahead for a supermarket and grocery ombudsman to monitor relationships between supermarkets and their small suppliers. The Grocery Supply Code of Practice comes into force on 4 February.
2) The answer is d) - Furniture and flooring shops are still continuing to struggle despite other high street retailers having their best Christmas since 2001, according to the BRC. Altogether, sales rose 6% year on year in 2009.
3) The answer is a) - BDO says that fraud increased by 76% in 2009, and reckons the average value of each fraud to business is £5 million. It expects total fraud levels to increase to £5 billion within the next couple of years. |
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Good luck
The EnterQuest Team
This information is meant as a starting point only. Whilst all reasonable efforts have been made, the publisher makes no warranties that the information is accurate and up-to-date and will not be responsible for any errors or omissions in the information nor any consequences of any errors or omissions. Professional advice should be sought where appropriate. |
