Are New Customers Worth the Cost of Prospecting?
First Rule of Thumb: A catalog company cannot break even overall on the initial orders generated from prospects.
Purchasing lists and mailing to potential new customers is expensive. It’s a fact of life in the catalog business, and at first glance, the costs might seem to outweigh the returns.
However, without new customers to add to your pool of existing customers, you can’t expect to grow — or even maintain the status quo. Prospecting is essential, so to keep your costs in perspective, it’s critical that you understand how and when you’ll see a return on that investment.
Catalog consultant and marketing expert Stephen Lett explains how to calculate the long-term return on your investment — and just how long you should expect to wait for that return.