Analyze Your Profit Contribution
How to determine contribution to profit and overhead
On the other hand, all mailings can’t be incremental, or you’d increment yourself into the poorhouse! It’s the housefile that must cover overhead expenses, and evaluate mailings to the housefile on a fully absorbed basis.
When prospecting, strive to cover only your incremental (out-of-pocket) expenses. This means you’re adding new buyers to your file at no expense to the company. A calculation for incremental breakeven follows:
- Companies:
- Lett Direct Inc.
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