Strategy: Decipher Web vs. Catalog Customers

The selling expense to sales ratio for a typical catalog company is 25 percent to 30 percent. Some firms experience even higher ratios due to higher costs for postage and paper. Internet marketing selling expenses should also be managed by this critical ratio, as shown in the provided chart.

Just like catalog prospecting universes have their limits, paid search opportunities aren’t unlim-ited. When investing in Internet marketing programs like shopping sites, the selling expense to sales ratio needs to be tracked. In my example, the selling expense to sales ratio for shopping sites is fast approaching the same ratio for the catalog. Paid search is also becoming more and more expensive.