The Response Economy: What it is and How to Profit from it
In a response economy, getting people's attention is everything. If you knew exactly how much it costs to get a response from your target audience over emails, texts, phone calls or other channels, how would that affect your outreach strategy? Whether your business is trying to sell a product, service or just get brand engagement from people, knowing the average cost per response (aCPR) puts you ahead of the competition. Right now, you can go to FynCom's front page to see live data of the aCPR over emails. What determines that rate? How can you make the most of this new economy of quick business responses?
Making the Most of the Response Economy
The response economy is based on the cost to get a response to an outbound or transactional message. This cost per response (CPR) varies depending on the channel used as well as the demographics of the respondent.*
Mastery of the response economy is key for business leaders focused on prospecting, lead generation, lead nurturing, and revenue technologies. Additionally, this concept also applies to transactional messages, like exit surveys to understand why customers churn or leave marketing sequences. Do you remember the last time you answered that "why did you unsubscribe" form? Me neither.
Currently, the data to determine CPR is siloed within email service providers, customer relationship management solutions, and other communications platforms. Since there is no clear metric that tracks or shows CPR across industries & demographics, it is challenging to use CPR to increase your return on investment for marketing and sales.
For now, we'll use general metrics to continue this article. When businesses send out emails to potential customers, they can expect to spend around $9 to $1,000 per month on average, depending on the number of subscribers to their mailing list and the platform used. However, this cost can change drastically when getting responses from a business's ideal customer profile. For example, if a company wants responses from high-value customers, then the cost could be as high as $3,000 per month. Additionally, the response cost can vary greatly depending on the communication platform used. Generally, phone calls tend to be more expensive than text messages or email campaigns.
On average, a reasonable response rate for your email or other campaigns is 10%. This can vary by about 5-10%, depending on how experienced you are and what marketing tactics you use. Take the average cost of your campaigns and divide by the total responses to get your average cost per response (aCPR). Based on these stats, the aCPR is around $19 for most companies.
Cut Costs with the Right Strategy
Understanding analytics and determining what inquiries to respond to will help any business better manage their time while also increasing conversion rates. Understanding who your ideal customer profile is and which communication platform they are most receptive to (i.e., email vs. text message) is important because it helps businesses reach customers where they're at. At the same time, knowing when different people tend to engage with certain platforms gives businesses another thing to keep in mind for managing social media opportunities, which has evolved considerably with this new digital environment.
Profit from the Response Economy
FynCom helps companies navigate the response economy by providing a "conditional rewards" platform that integrates with tools like Sendgrid and SlickText, allowing businesses to use A/B testing of incentives in emails and texts. As a result, customers get automatically rewarded at key points of their journey, which makes marketing efforts more effective. At FynCom, we're focused on automating the delivery of rewards in response to digital actions, letting companies focus on understanding their metrics, talking to more customers, and increasing conversion rates at every stage of the customer's journey. By using FynCom, businesses can manage their CPR, save time, and increase their response rates, leading to efficient sales, marketing & product feedback.
Companies that want to increase their conversion rates at every stage of their sales & marketing funnels need to utilize tools such as FynCom. The idea of zero-party data is something that if you get ahead of now, with tools like FynCom, you will be able to grow your business while others stagnate. Reach out to us today to learn exactly how our tech can work for you.
*The rise of privacy standards and consumer empowerment will have an effect on CPR. We will discuss that in a future article where we talk about third party data, first party data, and "zero party data".