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Best Practice 
Sanity Check OK. You've now worked out what adverts to place where, and what to do with the responses. However, it's possible to design an advertising campaign that successfully sells products to customers  but ends up costing you money! So, before you leap into action, take a short breather and conduct a sanity check on your plans.
One Step Campaign One Step Campaign For a One Step campaign the sanity check is fairly straightforward. You just have to calculate what's called the Breakeven Response Rate. Fill in the assumptions boxes below with the best estimates you can make.
Now calculate the results figures below using the formulas next to the boxes.
To make a profit your campaign must achieve a response rate higher than the breakeven rate. If your response rate turns out lower you'll lose money  even though you've made some sales and earned commission. Advertising response rates are typically pretty low. Two percent is doing well  and you could win marketing industry accolades for five percent! If your breakeven figure is above two percent you are probably going to lose money. So rethink your campaign plan. Once you've run a few campaigns you'll have a better idea of the rates to expect for your product.
Top of Page Two Step Campaign For a Two Step campaign the sanity check gets a bit more complicated. You have to build a simple business model and explore what happens if you make different assumptions about your customers' responses to your campaign. Fill in the assumptions boxes below with the best estimates you can make.
Now calculate the results figures below using the formulas next to the boxes.
The Profit / (Loss) figure is usually very sensitive to the assumptions you make about reader response rates and ordering rates. Try out different figures in these boxes to find out how far out you can be before a successful campaign turns into a disaster. You may like to set up this business model as a computer spreadsheet. Advertising response rates are typically pretty low. Two percent is doing well  and you could win marketing industry accolades for five percent! Ordering rates are higher and depend on the attractiveness of the product and brochure  rather than your advert. Twenty percent would be good. Fifty percent is achievable with the right campaign. Once you've run a few campaigns you'll have a better idea of the rates to expect for your product. If you're close to the breakeven threshold  or can only make a profit under unlikely assumptions  go back and rethink your campaign plan.
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