Bly.com Newsletter Archives An archived collection of Bob Bly’s Direct Marketing Newsletter

10/16/2003

HOW MUCH SHOULD YOU PAY FOR “PAY-PER-CLICK”?

Filed under: Newsletter Archive — site admin @ 5:17 pm

——————————————–

Bob Bly’s Direct Response Letter:
Resources, ideas, and tips for improving
response to business-to-business, high-tech,
industrial, Internet, and direct marketing.
October, 2003

——————————————–

You are getting this e-mail because you subscribed
to it on www.bly.com or because you are one of
Bob?s clients, prospects, seminar attendees,
or book buyers. If you would prefer not to
receive further e-mails of this type,
go to www.bly.com, enter your e-mail address,
and hit Unsubscribe.

——————————————–

BOOK OF THE MONTH

Financial Reckoning Day: Surviving the
Soft Depress of the 21st Century
By Bill Bonner, Addison Wiggin

*** Just released and already at Best-Seller:
NYTimes *** Best Seller: WSJ ***

“…The hazards of democratic consumer
capitalism and the financial follies of history
suggest that depressions are not necessarily a
thing of the past. In fact, they’re almost
certain to play a role in our future.
Which is why, here in the present,
we find CNBC and the financial media can
be hazardous to your wealth!…”

“…a powerful and insightful vision…”
– Martin Weiss, author of best-selling
Crash Profits

To order, click on the link below:

http://www.amazon.com/exec/obidos/tg/detail/-/0471449733/qid=1065011377/sr=1-1/ref=sr_1_1/103-5368194-5956626?v=glance&s=books

——————————————–

OUTMARKET YOUR COMPETITIORS BY KNOWING
WHAT A NEW CUSTOMER IS WORTH

To determine how much they can afford
to spend to get a new customer, many
marketers base that figure on the average
size of the first order.

Therefore, if the front-end product or service
is $500, they won?t spend anywhere near that
to acquire the customer, for fear
of operating at break-even or even a loss.
If they want to double their money on the
promotion, the most they?ll spend to make
the sale is $250.

But savvy marketers know that the amount
of money you can spend to acquire a new customer
should be based on the customer’s lifetime
value, not just the revenue from
the first order.

Lifetime value refers to how much money
your customer is likely to spend with
you during the period he remains a customer
of your business.

For instance, if the average unit of sale is
$500, the average number of purchases per year
is two, and the average customer remains a
customer for 5 years, the lifetime customer
value is $500 X 2 X 5 = $5,000.

Based on the average lifetime value,
you can see where it would in fact be
worth spending $500 to acquire a new customer.

The business owner who understands lifetime
customer value as it relates to customer
acquisition has a tremendous advantage:
He is willing to spend more to acquire
new business, because he knows its true value.

Example: A company selling books to corporate
librarians asked me to devise a marketing campaign
to get new corporate accounts to
start ordering books from them.

I asked the owner what he would be willing to
spend to get a new account. He said about $300.

Forget advertising, I advised. Just open up
an account for every company you want as a customer ?
and put $300 in it!

Send each prospect a personal letter telling
them they already have an account with you —
and that it contains $300 they can use
at any time this year.

Instead of a sales or marketing campaign, my
client gave the money he would have spent to
generate leads and makes sales calls
directly to his key prospects, so they
could try the service at no cost.
It worked like a charm!

Today online trading services use the same tactic.
They send you a letter telling you they
have opened an account for you with $75
or so in it. You get the money when you
do your first trade.

Need to stimulate business? Calculate lifetime
customer value, decide what percentage of that
amount you want to spend on acquiring new
customers (10% is a common figure), and
basically just give potential customers
the money in exchange for trying your
product or service.

——————————————–

HOW MUCH SHOULD YOU PAY FOR “PAY-PER-CLICK”?

Dana Todd, executive VP of SiteLabs, uses this formula:

Break-even cost-per-click =
average gross profit X average conversion ratio

If your gross profit is $5 and your average
conversion rate is 2%, then $5 X .02 = $0.10.
Maximum you should pay for
pay-per-click: 10 cents a name.

Source: Internet Marketing Report, 9/30/03, p. 2.

——————————————–

READ THIS BEFORE YOU PUT MORE LINKS ON YOUR SITE

A reader writes: “You state you have never heard
of someone telling another site operator not to
put up a link, and you mention that there’s
some question as to whether a site owner needs
permission to do so. I’m here to tell you
it’s better to ask!”

“On the privacy page of my Web site I put up a
small sidebar about being careful with confidential
information. I included a link to a national
organization that educates consumers on privacy
rights. Out of courtesy, I e-mailed the organization
to request permission. Let’s just say when I
received their response 6 weeks later, it was
not exactly the answer I expected. I removed
the link. Just something to consider…”

Source: L. Carpenter, www.topdrawerinkcorp.com

——————————————–
IS PRINT DEAD? NOT YET!

Mutual fund CDC Nvest has stopped sending quarterly
statements to its investors online — and is
now sending printed statements through
the U.S. Postal Service.

“E-Delivery has not been as popular with shareholders
as we had anticipated when launching it,” the fund
report. More proof that print is not dead, and
that not every communication should be online.

——————————————–
BUT FAX MARKETING MAY BE DEAD ? OR AT LEAST BADLY WOUNDED

Yikes!

Starting in 2005, new FCC regulations will make it
illegal to send a customer an order form, registration
form, renewal notice, ad, reminder, announcement, or
any other marketing effort by fax unless you first get
the customer?s permission to do so first, in writing.

What do you think? Is the FCC protecting consumers
from having their fax paper wasted with unsolicited
promotions? Or are they unfairly interfering with
your business?s ability to communicate quickly,
conveniently, and cost-effectively with your customers?
You can e-mail me your opinion at rwbly@bly.com
For details on the new FCC ruling, click on the
link below:

http://www.asaenet.org/publicpolicy/FCC_Fax_Rules

Source: The Newsletter on Newsletters

——————————————–

AND THE NEWS ISN?T GOOD FOR TELEMARKETERS, EITHER

After the National Do Not Call list was knocked
down in court, President Bush quickly signed
it into law.

Companies who make telemarketing calls to individuals
registered on the National Do Not Call List face
fines of up to $11,000 for each violation.

If you call 100 prospects without checking to see
if they are on the list, you could be facing $1.1
million in penalties!

TeleBlock(r) offers a do-not-call blocking system
that automatically screens and blacks outbound calls
in real-time. Calls are screened against federal, state,
in-house, and third-party do-not-call lists.

For more information call TeleBlock toll-free
at 866-556-8860 or click on: http://www.callcompliance.com

——————————————–

BOB?S NEW BOOK: “CAREERS FOR WRITERS, SECOND EDITION”

VGM Career Books recently released the revised
and updated edition of my book, “Careers for
Writers & Others Who Have a Way With Words.”
If you want to start or jump-start your writing
career, this book offers plenty
of career opportunities for writers to
make that dream come true. Order now and
get 20% off the cover price. Just click
on the link below:

http://www.amazon.com/exec/obidos/tg/detail/-/007140600X/qid=1048704295/sr=1-2/ref=sr_1_2/002-6839593-2717666?v=glance&s=books

——————————————–

UPCOMING SPEAKING ENGAGEMENTS

You can hear me give my presentation, “The World?s
Best-Kept Copywriting Secrets,” live at the
Folio show in New York City, October 27, 2003.
To register call 800-927-5007 or visit
http://www.folioshow.com

And with Steve Roberts of Edith Roman Associates
and Michelle Feit of ePost Direct, I will
be giving a talk “The TCD (Timing, Copy and Design)
Formula for Email Marketing Success” at
the DMA Annual Conference, Orlando, Florida,
Tuesday 10/14/03, 10:30 – 11:45 am. For more
information, visit http://www.the-dma.org

——————————————–

60-SECOND COMMERCIAL FROM FERN DICKEY, OFFICE MANAGER:

Bob is available on a limited basis for
copywriting of direct mail packages, sales
letters, brochures, white papers, ads, e-mail
marketing campaigns, PR materials,
and Web pages. We recommend you call
for a FREE copy of our updated Copywriting
Information Kit. Just let us know your industry
and the type of copy you?re interested in seeing
(ads, mailings, etc.), and if Bob is available
to take your assignment, we?ll tailor a package
of recent samples to fit your requirements.
Call Fern Dickey at 201-797-8105 or
e-mail dickeybf@aol.com.

——————————————–

Bob Bly
Copywriter/Consultant
22 E. Quackenbush Ave.
Dumont, NJ 07628
www.bly.com
rwbly@bly.com
phone 201-385-1220
fax 201-385-1138

——————————————–

Powered by WordPress