If you don't have 10% returns then you aren't tryin!

Sugarman is very successful, but he is focusing on the wrong numbers here. I find it incredible that somebody would think they are getting the most value out of their marketing because they were getting some arbitrary percentage of product returns.

When running a marketing campaign you look at the net revenues produced by that campaign. Both immediate and lifetime from that customer. Through testing you maximize those revenues. The focus is on the revenue not on the percentage of returns. I want to get my products into the hands of as many people as possible with as FEW returns as possible.

Giving customers more than they expect is not a bad business decision. It does not matter if you are one on one chatteling or mass marketing a product, giving more than is expected will increase your bank account more than you expect.

If you have a high return rate, you are over promising and your product is under delivering. I have worked with plenty of salesmen that over promise telling the customer just what they want to hear. It's easier to make the sale that way, but when the product does not perform as promised do you think those customers have much lifetime value for that salesman. Most customers who have gone to the trouble to order your product don't want to return it. Sure, there are always some that will order knowing full well they are going to return it, but they should be a very small percentage.

All of this said, if you are in business to make a profit (if you are not trying to make a profit why are you in business?) you should always be looking at your numbers. You should know which ads are the most profitable and which are the least. Saying your rate of product return is too low is meaningless.

Les




Have you read Gordon's Chattel Report??