Question
You are a marketing director for a company that sells smart coffee makers that integrate into a persons virtual assistant (e.g. Amazon Echo, Google Home,
You are a marketing director for a company that sells smart coffee makers that integrate into a persons virtual assistant (e.g. Amazon Echo, Google Home, etc). Rather than distribute the coffee makers through stores, your firm opted for a direct marketing focus and uses direct marketing channels to connect with your customer. Last year, you sold 87,500 coffee makers at $120 per unit, with a unit margin of $40 per unit. The firm invested $2,200,000 in the marketing campaign that acquired those sales.
The firm based its campaign on lists of people who recently purchased a smart home device. It allocated its direct marketing budget across 3 channels, as follows:
Channel | Spending | # Sales |
Paid Social | $1,000,000 | 40,000 |
Direct Mail | $850,000 | 31,500 |
| $350,000 | 16,000 |
- What is the ROI of the overall campaign?
- What is the cost of acquisition for each channel? Which channel performed the best?
- What recommendations would you make for the 2020 budget?
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