The Value of a Stamp

A seemingly random thing we observed years ago when we were doing some direct marketing was that we got a better response when we used a stamp placed at a slight angle.  We believed that stamps seemed to make the letters less “mass mailing”, but we also found that having the stamp not perfectly placed helped.  It looked like people had manually applied them.

It seems silly, but I bring it up to make the point that small things matter and in communications, you should be focused on the outcomes and ROI not simply on the cost.  I see so many times when people get so obsessed with saving pennies that they ignore the fact that a slightly higher cost service/solution/product has a better value.

I’ve observed that in things I buy also.  I might pay 2x what a normal pair of shoes cost, but my shoes last 3x as long as the cheaper shoes (so in the end they cost less).  This is true with furniture.  My question is why don’t people always apply that same logic when making other decisions.

I always try to help clients think about the result they are looking for and the cost per success not the cost per transaction.  For example:

Situation A:

  • 1,000 interventions
  • $0.60 per intervention
  • 4% success

Situation B:

  • 1,000 interventions
  • $0.75 per intervention
  • 7% success

Which would you buy?  The $0.60 service or the $0.75 service.  At first glance, you would gravitate toward the less expensive service, but if you don’t do the math, you’re making the wrong decision.

In Situation B, you have 70 successes at a cost of $750 (or $10.71 per success).  In Situation A, you have 40 successes at a cost of $600 (or $15.00 per success).

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