How Do You Know What E-Commerce Promotions Pay?
Historically, the catalog industry has measured the response rate for various promotions, the advertising cost of the promotion and its breakeven based on demand, product cost etc. Along comes the e-commerce world and many of the new promotional methods (such as e-mail, affiliate programs, etc.) are apparently not being measured.
At the same time, companies that were traditionally catalog oriented are spending 25% to 35% of sales for catalog advertising costs to create, print and mail catalogs. On the other hand, while the e-commerce programs are much cheaper our research shows they are spending 2% to 15% of net sales on e-commerce promotions.
The problem today is that the e-commerce costs are additive, incrementally. It’s not an offset to the catalog costs. And at the same time businesses have not been able to decrease catalog costs or eliminate the catalog without severely cutting sales.
How are you measuring your e-commerce promotions in terms of advertising and breakeven?
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hey this is a very interesting article!