Here is how we price our new-resident names. The inclusive price is not a single, fixed figure but a sliding scale; the more you commit in advance to accept, the lower the price for each. In that way we offer quantity discounts to large customers yet still keep costs affordable for small ones.
| Make no commitment except to start: | 45 cents |
| Commit to accept at least 2,000 over time: | 43 cents |
| Commit to accept at least 4,000 over time: | 41 cents |
| Commit to accept at least 8,000 over time: | 39 cents |
| Commit to accept at least 16,000 over time: | 37 cents |
| Commit to accept at least 32,000 over time: | 35 cents |
So, you're invited to choose your own price, within that range; the one with which you're most comfortable.
The chosen price will be multiplied by the quantity delivered in a given month, and invoiced accordingly. There's no extra charge such as shipping and postage; that's all you pay except for interest on the previous month's unpaid balance, if any.
If the resulting total should be less than $15.00 (and if the quantity delivered exceeds zero) then $15 will substitute, as explained on the Detailed Description page.
Here's how we suggest you pick your preferred price: look at the total estimated volume in the Custom Proposal we'll send, and see what that would mean in a year (any period will do, but many businesses have a one-year planning horizon.)
Then compare that with the commitment volumes above. Example: The estimate totals 200 names a month, or 2,400 a year. A good choice of price might be 43 cents, so committing to take at least 2,000. But I emphasize: you can choose ANY price.
Of course, you can start off with the open-ended 45 cent rate and, as soon as you're comfortable that the project is working well, then write to tell us you'll accept at least a further (e.g.) 8,000. From then on, your price is 39 cents.
Price is only one of three elements of cost (and the only one that C-AM will invoice.) The others are POSTAGE and PRINTING. And perhaps labor, though usually stuffing a few hundred envelopes a month has a zero marginal cost.
Postage is usually 33 cents, unless you have either an unusually heavy mailer or a postcard (20c). If you have a quantity of more than 200, speak to your postmaster about Bulk Rates - a few cents may be saved there.
Printing is within your control, varying from about 7 cents for a postcard, through perhaps 15 cents for an envelope with letter and enclosure, on up. We do NOT recommend an elaborate mailer with 4-color brochures, unless your business has found already that that's the most effective way to advertise.
| So your total costs may be: | 43 cents for the name & address |
| 15 cents for the mailer | |
| 33 cents for postage | |
| Total | 91 cents a piece, in the mail |
A volume of 200 a month would therefore cost $182/mo.
What does that expense buy you?
It buys you, of course, some NEW CUSTOMERS, that's what the whole project is about. So, to make a rational decision about it, you need to know THE VALUE OF A CUSTOMER.
The value to any business of a customer is the annual gross margin he brings it, multiplied by the number of years he continues to be a customer. Fixed costs should not be taken away from revenue; just the variable costs of serving one extra customer. Hence, "gross margin."
In a service industry like medical treatment (or a church, if I may term that an "industry" for this purpose) the variable costs are very low; in that latter case, close to zero. There, the gross margin is at or close to the revenue.
In a supermarket, gross margin may be much lower, (e.g.) 15% or 10% of the sales revenue. So please figure it out, for yours.
Example: a retailer has a 35% cost of goods sold, and sells $2 million gross a year, to 4,000 regular customers. His gross margin per customer per year will be:
| 2000000 x 0.65 | |
| ------------------ | = $325.00 |
| 4000 |
In his area (as in most) residents stay on average 5 years before they move away, so to his store a customer is worth
5 x 325 = $1,625
So, if $1,625 is the value of a customer to that business and his new-resident marketing project brings him even 2 extra customers a month (1% of 200) then his "payoff" is
2 x 1625 = $3,250
Granted, that's mostly future money and it's perfectly valid to reduce that to its Net Present Value; discounting at 8% a year for 60 months would bring that figure down to $2,671.
Last step; what's his return? He spends $182, gains $2,761 so his return is 15:1, or over $15 per $1 spent. NOT BAD!
That's just an example, of course. But it shows the method to use. Why not now use that method for your case?
The above presumes a 1% response rate (i.e. 2 new customers from a 200 piece mailing, on average) and that's typical for many types of business - though, please see our remarks on Question 12 on the page Frequently Asked Questions.
Key point: that response is determined in part by the QUALITY of the newcomer names you buy. That's why we go to so much trouble to get you the best possible list; both comprehensive and timely.
Frequently, I'm told we can find as much as 50% more new residents than our rivals. Even if they got them to you as fast as we do, that alone would mean you get 50% more new customers as a result!
Sometimes though the volumes are similar, and then it's important to compare the speed and convenience with which we deliver the file of names to you. If you wish, refer again to the remarks under Q5 of the page Frequently Asked Questions.
You'll be in a race, to reach the most newcomers, fastest. C-AM enables you to win that race.
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