Overspending (8/54)

The most damaging and easily avoidable marketing mistake is spending more on advertising than you make. I am constantly amazed by the number of people who have no clue what their maximum cost per conversion is on ad spend. You simply need to figure out what your total profit is on a sale (after paying for everything except advertising – COGS, shipping, credit card processing fees, etc.), add the bare minimum that you need to pay yourself and employees (if applicable) and that is the absolute most that you can afford to spend on a conversion (assuming you or your employees don’t work for free).

Contributor: Dave Hermansen from storecoach.com

Written by James Metcalfe

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