Analytics Take Up from review class

Client: Green Door Vitamins
Channel: Email & DM Website
Expenses: $15/month for 1 year for Constant Contact, Website hosting $240 / yr, $15 domain / yr, $2500 development
Reach: 500 email subscribers, 12000 website views
Reponses: 100 phone calls or emails, 196 clicks, 65 subscribers
Offers redeemed: 68 total, 20 from email only
Average customer: 15 x / year
Average sale: $26
Attrition of customer: 6 years
Offer: Free vitamin C with $10 purchase (vitamin C retail value = $8)
Wholesale price of vitamin C: $5
Pro-rated operating expenses per product: $2
Total sales from customers redeeming the offer: $1015 

CPP (cost per piece)

• ($15x12months) + $240+$15+2500 = $2935 expenses
• 500+12000 = 12,500 pieces sent (equivalent)

$2935/12,500 = 0.24 / CPP

CPR (cost per response)

• $2935 expenses
• 100+196+65 = 361 responses

$2935 / 361 = $8.13 / CPR

CPS/ CPT (cost per sale / transaction)

• $2935 expenses
• 68 sales / redemptions

$2935 / 68 = $43.16 / CPT

Gross Profit (campaign specific)

• 68 (redemptions) x $8 (offer) = $544 lost opportunity cost $544+$2935 = $3,479 total direct campaign expenses
• $10 (terms) x 68 = $680 offer generated revenue

$680 - $3,479 = $-2,799 Gross Loss

Bottom Line Profit (bottom line = can we pay our bills too?)

• $2 x (68 x 2) = $272 prorated operating expenses
  (don’t have # of products so must use # of transactions x 1 for $10 item and 1 for Vitamin C = 2, as an estimation)
• $5 (wholesale of Vitamin C) x 68 = $340 wholesale expense
• $3,479 + $272 + $340 = $4,091 true cost of campaign

$1,015 - $4,091 = $-3,076 Bottom Line Loss

LTV (Lifetime Value)

• 15 x 6 = 90 number of average sales of a customer’s lifetime at store
• 90 x 26 = $2,340 Lifetime revenue potential of an average customer

$2,340 + $43.16 = $2,383.16 LTV of a customer
$2,383.16 x 68 = $162,054.88 LTV of this campaign

ROI (Return on Investment)

• $162,054.88 LTV of campaign - $3,479 total direct campaign expenses

$158,575.88 ROI

Test Review

On top of using the cue cards (see the sidebar), make sure to study the analysis (aka math) formulas and components of a successful campaign. My slidedecks will be useful and if you follow the link to view them on slideshare you can download them from there and see my notes in the notes section of each slide.

The test will be a combination of short answer and multiple choice.

What to bring for the test next Thursday:

• pencil
• eraser
• calculator
• music is allowed but you won't be able to touch device during
• no hats, no kleenex, no talking

You will have 1.5 hours to write the test - although it is prepared to be a 45 minute test. You won't be able to leave the room during the test at all. No re-takes.