How Much Should You Spend to Acquire New Buyers?

Invest to Grow

Some catalogers say they don’t want to prospect below the incremental break-even point (net sales less cost-of-goods-sold less direct selling expenses) on a cumulative basis. They want to be sure all prospect lists they mail perform at least at breakeven or more.

While that’s a good goal, this philosophy can limit growth severely, because it’s unlikely you’ll find enough good lists that perform above breakeven to sustain a desired level of growth or even maintain the same sales from one year to the next. You must be willing to invest in acquiring new buyers. This can be accomplished only by mailing below the incremental break-even point.