Cash Flow Pricing for Profitable High Yield Selling

MondayTuesdayWednesdayThursdayFriday Tom Mary Bill Bob Joan Sally Finite Resource

Infinite Resources

Sales Reps Time Most Valuable Finite Resource Increasing Yield though – Improved selling process – High Yield Selling Higher Frequency Higher Average Ticket Strategic Bundling

Event Total amount of revenue a client books during a meeting with the sales rep

Sales Reps TimeHigh Yield Mindset

Proposed New Rates 1/8th 1/4 1/2Full 1x $ $ $ $ x $ $ $ $ x $ $ $ $ x $ $ $ $ x $ $ $ $

Why Quantitative? Relatively high fixed base costs – News gathering – Distribution – Print Relatively tiny incremental costs Extremely competitive market

Must be High Volume Marketplaces are king – No place for skinny products Fully loading high base fixed costs onto low volume isn’t an option High retention comes from advertiser ROI The old ‘barriers to entry’ we enjoyed in print are gone, much more market driven

High Prices = Low Volume

Low Volume = High Prices

Equals… Disinterested Consumers Poor Advertiser ROI High Advertiser Churn Too much sales time devoted to looking for new advertisers

Considerations Base delivery cost Incremental delivery cost Production capacity Yield on the reps time – Same ad; Sub, TMC and digital Optimum Volume

Incremental Postage Above 3.3 oz. $2.36 $4.82 Base Postage per tenth oz.

Profit Fixed and Variable Postal Costs

Profit Fixed and Variable Postal Costs Risk

Profit Fixed and Variable Postal Costs

Profit Fixed and Variable Postal Costs

Profit Fixed and Variable Postal Costs

Incremental Postage Above 3.3 oz. $2.36 $4.82 Base Postage per tenth oz. Average Postage $3.98

Incremental Postage Above 3.3 oz. $2.36 $4.82 Base Postage per tenth oz. Average Postage $3.98

Average or fully loaded delivery costs are meaningless and dangerous

For Example Carrier Delivery $100/M, average 4 preprints “Delivery Cost per preprint is $25” What happens if you lose one? “$33” Will the last guy left pay $100? Then don’t do this

The bigger your package, the lower your effective cost of distribution.

TMC Expenses Bringing YOUR Expenses into the Conversation

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