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So you’re considering sending out a direct mailing to prospects and/or customers? Before you take the plunge, it’s important to understand what’s involved in the costs and also what the expected return on investment would be for the mailing.
As for the costs involved, you’ll be looking at two main components when doing a direct mailing. First are the costs related to printing the mailing. This cost varies depending upon the type of mailing, whether that’s a letter, post card, or other type of correspondence. Other things that can impact the cost of the printing are the type of the stock of paper you use (higher quality will cost you more), as well as whether or not you choose to use color instead of black and white. And finally, with regard to printing, you can either choose to do a self-mailer (which does not require an envelope), or insert the direct mail piece into an envelope or box, depending upon what it is.
Second are the costs related to actually sending the direct mail piece in the mail. Of course, this will depend upon the size of the piece.
So should you proceed with your direct mailing? That really depends upon the potential return on investment! In order to determine the return on investments, you have to compare the cost of direct mail to the expected return. Return can be quantified in terms of how much business you can expect to get from the mailing. The latest averages indicate that around 1.75% of all direct mail ends in a sale. So for every 100 pieces sent, you might get 1 person to purchase.
The last step in determining whether or not to use a direct mailing is to calculate your potential sales that could take place and compare that with the costs of the mailing. So if your average sale is $100, and you expect to send 100 direct mail pieces, of which 1 will purchase, your total sales would be $100. If the costs of sending the direct mail piece is $50, then your return on investment is $50.
Knowing the costs involved and making a decision based upon potential return on investment will help you make wiser decisions regarding direct mailings.
Each month, quite a few start up businesses visit our site looking to find information on whether or not it makes sense for them to use outsourced warehousing and fulfillment services. Usually, they’re looking for the costs of fulfillment services to see if they can afford to use them. In our opinion, there’s really two good reasons to do the warehousing and fulfillment internally to start. And we believe there’s one good reason to outsource from the very beginning. Let’s explore the options…
There’s really two good reasons to not use outsourced warehousing and fulfillment services as a start up. First and foremost, if you’re core business involves distribution or if you believe that the logistics are so important and critical that you cannot outsource, then by all means keep it in house. However, most companies don’t fall into this bracket. Secondly, we totally understand that your start up may be constrained by capital, and therefore you may not have the funding to be able to use a fulfillment service. In this case, the only option is to use your own labor – which, by the way, isn’t FREE!
Which brings us to our last point – why we believe that many small businesses would be best suited by outsourcing fulfillment. If fulfillment and warehousing aren’t your core business and if you at least have enough money that outsourcing is an option, we believe that it can be the best option for you. Why? Because of that beautiful thing called “opportunity cost.” A lot of small business owners like to have control over all aspects of their business. But by keeping control of the fulfillment and therefore processing orders yourself, you lose valuable time that could be spent elsewhere – like in sales and marketing.
It is absolutely true that the biggest problem that most companies will face is a “sales problem.” And by sales problem, we mean not enough sales! Think of it, what inhibits you most in your business? Not having enough funding (or sales) to expand and do what you need to do to run the business the best way possible. By getting the warehousing and fulfillment of of your shoulders, you’re much better suited to spend time where it needs to be spend – in growing the business. And if you’re not growing as a business, you’re shrinking.
Especially in this economy, it’s vitally important to make sure that your company is doing everything that they can to keep costs in line, including making sure that your using the best merchant accounts. Credit card processing fees can add up significantly, especially as your monthly sales increases. For every $10,000 in credit card payments processed, you can expect to pay $300 to $400 per month in credit card processing fee – or more! So saving even a half of a percent, while not seeming like very much, can add another $50 per month into your pocket. This translates into $600 per year! And that’s only at a $10,000 per month level. Think if your business starts accepting significantly more in credit card payments.
So when you’re looking for the best merchant accounts and comparing among many different options, be sure to read all of the fine print. Like many other industries, merchant account companies like to play the shell game. Oftentimes, they’ll lure you in with low rates, only to hammer you with per transaction fees or monthly fees as well. And sometimes the opposite is true – they’ll promise not to charge you extra fees, but will increase the transactional fee percentage charged. Either way, pay close attention to all of the fees when comparing different credit card processing vendors.
And one final thing when making a choice: don’t mistake convenience with the right choice. Many merchants simply use the merchant account option that is provided through their platform, such as eBay or Amazon. While it is easy to use these options, they may not be the lowest priced option. So be extremely careful when looking at the options, and you could end up saving your company a great deal of money over time!
Using call centers to take a load off of your shoulders for your small business is one option that can truly help. All of you small business owners out there know just how valuable your time is – balancing the duties of many different functions within your company. This balancing act can become literally exhausting, not to mention close to impossible. And granted, it’s totally understandable how important answering phone calls from customers can be – this is the face of your company and can include sales, taking orders, handling complaints, etc. But the things that call centers can do to integrate within your business are astounding, making it seem as though they are contacting your own people.
In the beginning stages, these outsourced providers work closely with you in order to script and document all the different types of scenarios that can come about on a phone call. They can document exactly how you wish for them to respond to your customers, so that it closely mimics how you would respond yourself. This is a great fear of many business owners – letting go of the control for fear that they won’t be able to direct the process completely. In addition to scripting, they can also transfer calls to certain individuals in certain circumstances, so that important calls can be taken care of by someone internal to the company. This offers a high degree of flexibility and customization that makes outsourcing more of an option for some.
Add to this flexibility online integration and reporting – and you have a powerful tool to take a load off of your business. call centers can integrate with your shipping and crm systems, and the best companies offer online reporting of all of the call metrics. This helps you to have control and oversight over the process, instead of feeling like you’re on a remote desolate island without any information. It can truly be a powerful tool to help you run your business more efficiently – because then you can use this new found time on a key area of your business. And watch your business grow from there!
