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Direct Response Marketing - Direct Order Campaign Breakeven ROI Calculator by Media Type
Use this pro forma Breakeven Analysis - Direct Order Campaign BE Marketing Calculator to determine the breakeven response rate and orders required for your B2C or B2B direct response, direct marketing campaign.
This calculator uses response rates from DMA (Direct Marketing Association) Response Rate Study. It will compute the breakeven response rate and orders required for your campaign based on the circulation, advertising cost, average order value, and gross margin percentage that you enter. You can then compare your campaign's breakeven results achieved for the media type your planning to use to industry norms for this type of media. Choose media type, then the industry average, median, high or low response rate for direct order programs.
The industry response rate that is shown as the "Typical Response Rate" is intended for comparison purposes only. It is intended to give you an idea of whether or not the response required to achieve breakeven for your campaign, based on the circulation, advertising cost, transaction value, and margin that you entered, is realistic. Your program may do better or worse than the reported response rates depending on your selling price point and merchandise being offered.
Instructions (Click to Open)
Use the deviation from required breakeven response rates and typical response rates to determine just how far above or below your breakeven is below the industry standards for the typical response rates for these vehicles / channels. It will help you determine if the necessary breakeven response rate is achievable. For example, if you see that the required response rate is 50% higher than the industry standard, it is highly improbable that you can reach the necessary breakeven. So, your options to reduce your breakeven and make it more achievable would including reducing the cost of your campaign, increase the average transaction value or increase the gross margin.