A health-related company wants to hold a seminar for nurses. They expect to charge $75 for the seminar, and the nurses earn a few continuing educating (CE) credits (a nurse needs several CE credits each year to retain his or her license). This is a one-day only seminar with no option for a second seminar date. Maximum number of attendees is 75. The brochure is appealing and costs .20/ea. to print.
Problem: How many mailers should we mail to fill the class and still make money? We have to make some assumptions first. All attendees will come from a 10-mile radius (we have 22,000 RNs in the area). Postage cost is .148/ea. Brochure cost is .20/ea. Mailshop costs (affixing the labels, banding and delivering to the post office) are .05/ea. List cost is .05/ea. Total cost to mail is about .45/ea.
If we assume a 1% response, and we have 75 open spaces, then we'll need to mail out 7500 brochures (75 spaces x 100 brochures for each one respondent). Cost for the marketing will be $3,375 (7,500 x .45/ea.) with gross revenues of $5,625 (75 attendees x $75/ea.) or a gross profit of $2,250.
Since the health-related company has a big presence in the area, and nurses need to take a certain number of CE credits, the seminar may easily pull better than a 1% response. Assuming we have enough time for a second mailing, I would recommend mailing randomly to 4,000 nurses (4,000 x .45/ea. = $1,800) to see if the seminar will fill up with fewer prospect mailings.
If response actually hovers around 1%, the company will still have enough time to mail out the remaining 3,500 to fill up the seminar. If responses are less than 1%, then additional mail-outs can be added to the marketing effort. Or the brochure can be modified to increase the response. Or, if the initial response indicates there really is no desire for this seminar, the class can be be cancelled with less of a financial burden than if the company had mailed out the full 7,500 brochures.
Doing this planning at the beginning will give the company more confidence to mail a specific number of pieces. It will also allow them to make a greater profit if their assumptions are correct. And if their projections are incorrect, they won't lose their shirts.