How to Make List Prospecting Work

Expense Per Customer

Understanding lifetime value, or even 12-month payback, is the first step in the customer-acquisition process, no matter what method you use to get new clients. Determine what return on investment you must make to bring in a new customer.

One way to do this is to look at an estimated 12-month payback from a newly acquired customer. By forecasting the number of mailings, estimated response rate, average order value (AOV) and average catalog cost — and knowing your contribution margin — you can do just that.