4. SPC Marketing Matrix Total Revenue: Marketing Method A contributed x% of our total revenue for the quarter/year. ex: 10% of total revenue Total Costs: Method A contributed x% of our total costs. ex: 5% of total costs Productivity: Method A required x amount of labor hours to result in one account sold. ex: 2 hours/acct sold Cancellations: Method A contributed to x% of total cancellations. ex: 1% of cancellations
5. Example: How are they related? METHOD A: COMMUNITY SAFETY SEMINARS Accts Sold Total Revenue Total Costs: Retained Earnings: Last Year: 10,000 @ $1000 $ 10,000,000 @ $600 $ 6,000,000 $ 4,000,000 Current Year: 15,000 $ 15,000,000 @ $591.33 $ 8,870,000 $ 6,130,000 Years Growth: 5,000 $ 5,000,000 $ 2,870,000 $ 2,130,000 Method A: 1,300 $ 1,300,000 @ $500 $ 650,000 $ 650,000 Door to Door: 3,700 $ 3,700,000 @ $600 $ 2,220,000 $ 1,480,000 Growth Last Year: - - - - Current Year: 50% 50% 48% 53% Years Growth: - - - - Method A: 26% 26% 23% 31% Door to Door: 74% 74% 77% 69%
6.
7. METHOD A: COMMUNITY SAFETY SEMINARS* Accts Sold Labor Hrs/ Unit Total Labor HRS Cancel Rate Cancels Cost of Cancel Labor HRS/ Cancel Last Year: 10,000 11.43 HRS 114,300 @ 5% 526 $ 433,950 6012.18 Current Year: 15,000 176,091 734 $ 605,550 8436.03 Years Growth: 5,000 61,791 208 $ 171,600 2423.85 Method A: 1,300 15 HRS 19,500 @1% 13 $ 10,725 195 Door to Door: 3,700 11.43 HRS 42,291 @5% 195 $ 160,875 2228.85 Growth Last Year: - - - - Current Year: 50% 54% 39% 39% Years Growth: - - - - Method A: 26% 32% 6% 6% Door to Door: 74% 68% 94% 94%
8. Conclusions: It is essential to evaluate each strategy from each of the four points in the SPC marketing matrix to see what our opportunity costs are which enables us to make the best choices for our bottom line. CONCLUSIONS: Now we can analyze what would be more efficient by showing what our opportunity costs are through one method. Hypothetical Situation Opportunity Costs Method A Method B Method A Only Method B Only Accounts Sold: 1300 3700 5000 6234 Total Revenue: $ 1,300,000 $ 3,700,000 $ 5,000,000 $ 6,234,000 Total Costs: $ 650,000 $ 2,220,000 $ 2,500,000 $ 3,740,400 Retained Earnings: $ 650,000 $ 1,480,000 $ 2,500,000 $ 2,493,600 Total Labor Hours: 19,500 42,491 75,000 75,000 Cancellations: 13 195 51 328 Cost/Cancellation: $ 10,725 $ 160,875 $ 42,075 $ 216,975 RE less Cost/Cancel: $ 639,275 $ 1,319,125 $ 2,457,925 $ 2,276,625
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