Use Contribution-Based Marketing for True Measurement

When calculated correctly, you can set contribution targets for each mailing and have instant performance indicators to be compared to your financial plan. By adding this statistic to your performance spreadsheets, you can track and review the P&L monthly, weekly or even daily. This provides much needed reaction time to adjust future plans, and in a whole new set of ways.

When you realize that marketing contribution per order (MCO) can be improved by virtually anything that goes on in a catalog business, you take the marketing department to a whole new level. Along with finding that right list, you can make a substantial improvement by being proactive on the cost side. While you're always interested in the cost of printing, the price of paper, the negotiation of list rental charges and other mailing costs, you're now much more aware of the impact of costs involving shipping materials and delivery costs.

By using MCO as a prime measurement factor, you can turn an entire organization into a profit-conscious, cost-efficient machine. Increases in sales and decreases in costs are immediately apparent and measurable. You can even do what-if scenarios to determine the financial impact of things like using new technology or reorganizing the fulfillment center to improve efficiency.

Measurement and control is the essence of cataloging. It's even more important in today’s business climate. It’s vital that you use the right measurement statistics.

Bob Klapprodt is a consultant at Bob Klapprodt Direct, a catalog and direct marketing consulting firm. He can be reached at bobrpk@embarqmail.com.

Jim Gilbert is President of Gilbert Direct Marketing Inc., a full-service catalog and direct marketing agency. His LinkedIn profile can be viewed at www.linkedin.com/in/jimwgilbert. You can e-mail him at jimdirect@aol.com or follow him on Twitter at www.twitter.com/gilbertdirect, or read his blog at gilbertdirectmarketing.wordpress.com/.