So simple, so easy to use, so why is it free?
In the world of CRM, numbers matter. Numbers are the lifeline of any business, whether its e-commerce, affiliate marketing, or even a traditional brick and mortar store.
Flying by the “seat of your pants” will only get you to crash, HARD. Businesses that don’t understand numbers, nor care about them have only one guarantee: failure.
You don’t want to fail, and you don’t want to take math or accounting classes just to take the guess work out of an idea for a campaign, so what do you do?
ResponseCRM has a campaign calculator. This isn’t your run of the mill calculator either. This calculator takes the guess work out of everything, and takes it to the next level. You can calculate a single product, an upsell, recurring charges, and even an upsell that is recurring. The resulting figure will even tell you when the campaign will become profitable!
The Campaign Calculator Demystified
Let’s take a look at the calculator and all of its inputs.
Customers Per Day – Simply enter the amount of paying customers you receive each day, on average.
Signup Amount – This amount is either the purchase amount or the initial purchase amount.
Shipping/Order – This is the cost of shipping per order sold.
COGS – What was the price you paid for the goods you are reselling?
Signup Refund – The % of refunds you estimate after signup.
Media Cost/Order – Your total media costs divided by the total number of orders. This can be the affiliate commission paid per order.
Signup Chargeback – The estimated % of chargebacks you believe will occur.
Processing Fees – These fees are charged by credit card companies or other payment services.
Reserve Amount – This is a % of your total income withheld in escrow (or similar accounts) by credit card processors for a specific period of time in case of chargebacks etc.
Reserve Duration – This is the amount of time processors will hold your reserve funds for. Typically, your first month’s reserve is released at your seventh month’s start on a six-month rolling reserve period.
Average Per Customer CS Fees – Total amount spent on customer service divided by orders.
Campaign Longevity (Months) – How long the campaign will run for.
Let’s look at the numbers that the calculator generates for you.
Total Income = Customers per day X Signup Amount X Campaign Longevity
Total Sales = Total Income – (Total Refunds + Total Chargebacks)
Total Costs = Total Shipping + Total COGS +Total CS Fees + Total Media Costs + Total Processing fees
Total Profit = Total Sales – Total Costs – Total Reserve Hold
And it even generates a timeline for profitability in days!
When you add the features of being able to calculate upsells, recurring billing, and upsell recurring billing, the calculator pays for itself. Hey, it’s free to begin with!
Attempting this math through long hand can lead to errors, so we simplified it for you.
We will run through various scenarios on how to use the calculator for different strategies including trial upsells.
Single Item Campaign
If you want to see the profitability of a single item campaign, simply input the numbers and view the results. Here is a product example, where we will breakdown the figures from what the customer sees, to what your costs are.
Once you’ve entered all the data, you can see how 100 customers per day buying a $99.95 product that wholesales for $9, with a $5 shipping cost will net you a total profit of $1,695,662.25.
What About an Upsell?
Let’s go through the change in numbers step-by-step.
|Upsell||This is the % of your total customers that buy the upsold product.|
|Upsell Amount||This is the customer’s cost.|
|Upsell Shipper/Order||Your cost for shipping per order.|
|Upsell COGS||Your Cost of Goods Sold (for the upsell).|
|Upsell Refund||The % of customers that request a refund.|
|Upsell Media Cost/Order||The cost of media per order. $0 denotes item will not be paying out an affiliate commission.|
|Upsell Chargeback||The % of orders that become chargebacks.|
Here is a side-by-side comparison of the results.
What about adding a recurring cost to the campaign?
If you’re selling a product that has an initial price for a trial period, but then increases to a fixed priced for a monthly recurring cost, you will need to know how your campaign will perform before you launch it. Let’s look at an example of a product that is “Free Plus Shipping” for the customer, and then becomes a recurring charge of $49.95 after a 15-day trial period.
As you can see, the campaign will become profitable on the 80th day, because the gross of the income is from the 16th day forward, once the trial period ends. You can adjust retention rates between billing cycles as well.
This calculator also allows you to add an upsell which can be billed on a recurring basis. Here is an example of a $99.95 product, with an upsell that sells for $49.95, and recurs for two cycles.
You can adjust the rates of retention, billing amount, refunds, and chargebacks between billing cycles.
Here are the profitability results of the campaign.
The campaign calculator is a godsend because of the unlimited possibilities that it provides for strategizing your next campaign. Don’t burden yourself with trying to crunch your own numbers, just to see if your campaign will even become profitable, instead just use the calculator.
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