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Cost per response

This step introduces learners to the cost of response formula and how to use it.
An example of a cost per response formula

A neat way of calculating a return on marketing spend is to measure the cost per response. The cost per response shows how much it costs to get a response through whichever channel you use.

Cost per response is a great leveller which allows you to work out which channel is delivering the best responses for the money being spent.

It is important to also consider other factors when working on media selection. While a channel may deliver a low response rate, it could also be the one who brings in customers who spend more and stay with the company longer.

You can also use the equation to calculate the cost per response by campaign rather than by individual channel. This can take into account the uplift of channels working together.

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Introduction to Marketing: Fundamentals of Marketing

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