Direct Marketing Math

Direct mail and direct marketing are all about results and return. Hopefully finding all these formulas in one place is helpful.

Response Percent                     =          (responses / mail quantity)  X 100

Raw Cost Per Response          =          cost per package / response rate

Break Even Response Rate    =          cost per package / cost per response

Average Order                           =          sales dollars / number of orders

Loaded Cost Per Response    =          (cost per package / response rate)  +  fulfillment  +  telemarketing

Profit per Buyer                          =          profit dollars / number of buyers

Marketing Cost Per Order        =          marketing cost / number of orders

Load Cost Per Sale                  =          cost per lead / closing rate

Maximum Package Cost         =          cost per response  X  response rate