To profitably grow a business, you need to invest the right amount in prospecting. But what is that right amount? It varies by company based on several factors including sales goals, profitability targets, short- and long-term strategic plans, and how customer lifetime value (LTV) compares with acquisition costs.
Jim Coogan, president of Santa Fe, NM-based consultancy Catalog Marketing Economics, says that it is worthwhile to pay for those extra selection charges to get the most targeted names available from rental lists. After all, the incremental response from taking the best-of-the-best names from a rental list will pay the extra costs of the selects.