“Where is the focus?” – Simplified Marketing Version

Step 1: List all the Marketing efforts currently in play.

Step 2: Along side the efforts listen above, list the revenue, expenses and number of orders generated by the efforts.

Step 3: Now calculate the cost per conversion and the average order value of these efforts. (Cost per conversion refers to the amount it cost to gain a sale. Calculated by taking Total Cost/Number of Orders. Average Order Value is calculated by taking the Total Revenue/Number of Orders.)

Example

In this example the print newsletter cost $32.14 per sale, the average sale price was $50.00. This leaves a total of $17.86 left to cover all other expenses including cost of goods sold.

Re-purposing

Search Engine Marketing analyzing the ROI of individual keywords and campaign sets
Email Newsletters - products placement, timing of email delivery
Website - homepage/hotspot product placement
Affiliate/Partnership marketing – actual value of partnerships cost of relationship

Keep in mind when making business decisions there are many other factors that contribute to overall profitability and business growth. By monitoring these cost you are more aware of these factors, which could lead to question and analyzing other factors, leading to quicker decision making before money is lost.

All calculations mentioned are basic business practices. Often it taking time to focus on these costs and to decide where energy can be better placed can have a big impact on the growth of a business.