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Do you keep track of your numbers, you know the amount of money that you spend on producing products, advertising, shipping and handling? This is huge in the Information Marketing business- "Know Your Numbers!"
You need to keep really good track of all these numbers:
1) Product Cost- Do you know how much your products are services cost? Are you making money or losing money? You better know your margins well. It might be time to reassess your prices and do an increase. Yes, you can increase your prices in a recession, don't listen to Wal-Mart or Kmart. The money is not in discounting your prices.
2) Advertising Cost- This is really key- you need to keep track of ALL your advertising, especially if you're doing multi-step direct mail campaigns, or postcard series, email newsletters, etc. There has to be a system that you put in place to know WHERE your prospects are coming from and how much it costs to acquire a new prospect. This way you will know how affective your advertising and marketing really is out there versus how much it costs.
3) Shipping and Handling (S&H) Costs- Lots of different studies have been done on how much to charge for shipping and handling. What's interesting here is people who've not charged for shipping and handling have gotten basically the same conversion rate as people who do charge for shipping and handling. Moral of the story is definitely charge for S&H. Things to think about- if you give them a refund, you might consider subtracting the S&H.
4) Refund Percentage- If you have a great product or service, this ought to be pretty small, like 10% or less. In this crazy economy it might be a little higher. The important thing here is to know what the number is and keep track of it to ensure it stays in the low figures.
5) Profit & Loss- This needs no explanation or you wouldn't be in business.
6) Other numbers you really need to get a handle on are- Your cost per sale, your total number of sales, and your conversation rate for your advertising and marketing pieces.
There's much more to this number thing and keeping track and score of them all. You just really need to get a good handle on these in order creating an even more successful business. So watch your numbers, or higher an expert to help you with them. Keep track of them and make important business decisions based on your all of these numbers.
Labels: Shannon McCaffery