Breaking Even For Profit

Usually when a company is assessing ROI on their advertising campaign they look at the simple figures.  If they spent $1000.00 and profitted twice that much, then they are doing well.  But if they didn’t make their money back or merely broke even, then they consider the campaign unsuccessful.  But is that really all we need to look at?

Many companies underestimate the power of branding on the internet.  One reason they do this is because branding takes time and the dividends don’t always show up until down the road, making it hard to measure.  For example someone purchases a product at your website and then comes back a year later to buy something else.  This won’t show up right away when tallying those numbers.  Or this same person during that year tells a few of her friends about your website and some of them visit your site and purchase your products.  They then come back again and also tell their friends who tell their friends and before you know it you’re the next Yahoo!  Well just don’t hold your breath on that one.

Another benefit of spending your advertising budget to make zero profit is in building a mailing list.  Most ecommerce software these days collects your customer’s phone numbers, address, and email address.  This enables you to offer discounts and special offers to your past customers.  Since these customers already bought from you there is a certain degree of trust established and this makes them more likely to buy from you again.  So in sending out a simple email or coupon in the mail, you can bring some of those customers back to buy again.  While it may have cost you using Google Adwords for example a dollar for the click to pick up a new customer, the email you send that results in additional sales from them may cost you nothing.  And you can do this again and again for months and years to come!

So when assessing your advertising campaign don’t just look at the figures but be sure and consider in the other factors.  If you are breaking even or even losing money, you could very well be on your way!  Can you say Yahoo!