cash flow pricing for profitable high yield selling
TRANSCRIPT
Cash FlowPricing for Profitable High
Yield Selling
Monday Tuesday Wednesday Thursday Friday
Tom
Mary
Bill
Bob
Joan
Sally
Finite Resource
Infinite Resources
Sales Reps Time• Most Valuable Finite Resource• Increasing Yield though– Improved selling process–High Yield Selling• Higher Frequency• Higher Average Ticket• Strategic Bundling
Event• Total amount of revenue a client books
during a meeting with the sales rep
Sales Reps Time High Yield Mindset
Proposed New Rates1/8th 1/4 1/2 Full
1x $ 180.00 $ 315.00 $ 540.00 $ 900.00
3x $ 144.00 $ 252.00 $ 432.00 $ 720.00
5x $ 126.00 $ 220.50 $ 378.00 $ 630.00
8x $ 108.00 $ 189.00 $ 324.00 $ 540.00
13x $ 90.00 $ 157.50 $ 270.00 $ 450.00
Why Quantitative?• Relatively high fixed base costs–News gathering–Distribution–Print
• Relatively tiny incremental costs• Extremely competitive market
Must be High Volume• Marketplaces are king– No place for skinny products
• Fully loading high base fixed costs onto low volume isn’t an option
• High retention comes from advertiser ROI• The old ‘barriers to entry’ we enjoyed in
print are gone, much more market driven
High Prices = Low Volume
High Prices = Low Volume
Low Volume = High Prices
Equals…
• Disinterested Consumers• Poor Advertiser ROI• High Advertiser Churn• Too much sales time devoted to
looking for new advertisers
Considerations• Base delivery cost• Incremental delivery cost• Production capacity• Yield on the reps time–Same ad; Sub, TMC and digital
• Optimum Volume
Incremental Postage Above 3.3 oz.
$2.36
$4.82
Base Postage per tenth oz.
Profit
Fixed and Variable Postal Costs
Profit
Fixed and Variable Postal Costs
Risk
Profit
Fixed and Variable Postal Costs
Profit
Fixed and Variable Postal Costs
Profit
Fixed and Variable Postal Costs
Incremental Postage Above 3.3 oz.
$2.36
$4.82
Base Postage per tenth oz.
Average Postage
$3.98
Incremental Postage Above 3.3 oz.
$2.36
$4.82
Base Postage per tenth oz.
Average Postage
$3.98
Average or fully loaded delivery costs are meaningless and
dangerous
For Example• Carrier Delivery $100/M, average 4
preprints• “Delivery Cost per preprint is $25”• What happens if you lose one? “$33”• Will the last guy left pay $100?• Then don’t do this
The bigger your package, the lower your effective cost of
distribution.
TMC Expenses
Bringing YOUR Expenses into the Conversation
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