Calculate Costs for List Segments and Lists
To calculate the variable costs for list segments in a marketing effort, the program adds the total segment costs to the total list costs.
For example, you have an effort based on a list that includes two segments — subscribers for a 3-month period and a 6-month period. The segments both contain rental and exchange records. The tables below demonstrate how segment costs are calculated.
The program first calculates the costs for each segment by multiplying the quantity of records by the cost/m (cost per thousand).
|
3-month segment |
Quantity |
Cost/M |
Total |
|
Rental |
10,000 |
$12.00 |
$120.00 |
|
Exchange |
5,000 |
$1.00 |
$5.00 |
|
|
$125.00 |
||
|
6-month segment |
Quantity |
Cost/M |
Total |
|
Rental |
20,000 |
$15.00 |
$300.00 |
|
Exchange |
5,000 |
$1.00 |
$5.00 |
|
|
$305.00 |
||
Then the program calculates the “per piece” cost by dividing the total list cost by the total number of records in the list. For this example, $2,410 / 40,000 = $0.06025. This distributes the base list cost across the two segments in the marketing effort.
Note: The marketing effort may not use all the records in segments for the list. For this example, if another effort included segments from the same list, those records would be included in the quantity and would affect the “per piece” amount.
|
List cost for marketing effort |
Quantity |
Cost/M |
Total |
“Per Piece” List Cost (Total cost / Total quantity) |
|
Total Rental |
30,000 |
$80.00 |
$2,400.00 |
|
|
Total Exchange |
10,000 |
$1.00 |
$10.00 |
|
|
|
40,000 |
|
$2,410.00 |
$0.06025 |
Finally, the program calculates the list cost for each segment by multiplying the “per piece” cost by the quantity for each segment. To calculate the total variable cost for each segment, the program adds the total segment costs and total list costs.
|
3-month segment |
Quantity |
Cost/M |
Segment Cost |
List Cost |
Total Variable Cost |
|
Rental |
10,000 |
12.00 |
$120.00 |
$602.50 |
|
|
Exchange |
5,000 |
1.00 |
$5.00 |
$301.25 |
|
|
|
$125.00 |
$903.75 |
$1,028.75 |
||
|
6-month segment |
Quantity |
Cost/M |
Segment Cost |
List Cost |
Total Variable Cost |
|
Rental |
20,000 |
$15.00 |
$300.00 |
$1,205.00 |
|
|
Exchange |
5,000 |
$1.00 |
$5.00 |
$301.25 |
|
|
|
$305.00 |
$1,506.25 |
$1,811.25 |
||
The Variable Cost for each segment appears on the Segments tab of the marketing effort.