Do you CVP your marketing?
Have you ever wanted to know how your products/sites/offerings/ad clicks/whatever stack up to the next one?
In Supply Chain Management there is a nice little fomula called cost volume profit (CVP), aka break even chart. I know you may be saying that you don't do supply chain or sell a product that you ship, but dont worry this can be used on everything.
I personally have used it on B&M products that we ship from a warehouse, Adsense clicks, memberships, you name it.
What is really cool about this chart is that it helps you see what you are getting out of your work, is your time/money being invested well, are you going to make more or less money compared to another methods. Or are you out right losing money dues to some time-to-cost expense.
For example I had a test site using Adsense, the site pulls in around 44 cent a click on average. Based on this I entered in my server cost, and added a 1/10th cent a click variable cost to cover expansion of the service.
In my next example I did a quick test on pricing and quantity.
Im my test above I did a couple quanity test from 10 items sold to 1,000. As I sold more I saved $1 in variable cost, and as the quantity of items sold went way up I was able to earn more money and reduce my cost to the customer which helps me continue to have a competitive edge.
For those that find this interesting or want to give it a go, checkout the zip file it has an excel that you can use.
Best!
In Supply Chain Management there is a nice little fomula called cost volume profit (CVP), aka break even chart. I know you may be saying that you don't do supply chain or sell a product that you ship, but dont worry this can be used on everything.
I personally have used it on B&M products that we ship from a warehouse, Adsense clicks, memberships, you name it.
What is really cool about this chart is that it helps you see what you are getting out of your work, is your time/money being invested well, are you going to make more or less money compared to another methods. Or are you out right losing money dues to some time-to-cost expense.
For example I had a test site using Adsense, the site pulls in around 44 cent a click on average. Based on this I entered in my server cost, and added a 1/10th cent a click variable cost to cover expansion of the service.
In my next example I did a quick test on pricing and quantity.
Im my test above I did a couple quanity test from 10 items sold to 1,000. As I sold more I saved $1 in variable cost, and as the quantity of items sold went way up I was able to earn more money and reduce my cost to the customer which helps me continue to have a competitive edge.
For those that find this interesting or want to give it a go, checkout the zip file it has an excel that you can use.
Best!