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Direct Mail Testing Financial Analysis Calculator
The Mail Testing Financial Analysis marketing calculator helps you determine acceptable response levels for a test direct mail campaign.
In Section 1, you calculate the minimum response rate necessary to achieve the desired ROAI (return on advertising investment) based on mailing costs, gross margin dollars per order and any associated premium or incentive cost. It will also calculate the breakeven response rate. Enter 100% in the Marketing ROI cell to determine the breakeven response rate. If you would like a larger return on your advertising investment, for example a 20% profit, enter 120% in the Marketing ROI cell.
In Section 2, you calculate the minimum sample size required for a test mailing based on the confidence level you want in the results and the percentage deviation that you are willing to accept from the anticipated response rate for the program. You can use either the ROAI or the Breakeven Circulation calculations or both to see the difference in testing circulation required for achieving your ROAI or breakeven. You can also ignore the ROAI Response Rate and Breakeven Response Rates and enter different response rates in the cells below the box to check to use the ROAI Response Rate and Breakeven Response Rate. The use Response Rate from above boxes must be unchecked.