2005 - 10-27-05

We now have a $6,000 gross... minus $1,200 in refunds... and minus $1,000 for the costs of advertising. What you have left then is a $3,800 contribution to overhead. Now I'm not positive about this... but... Sir Gary of Halbert believes...

It Is Better To Have $3,800

Than It Is To Have $800

The math doesn't always work like this. Sometimes adding the 30-day hold will more than triple your gross sales... and not increase your refunds. Sometimes adding the 30-day hold will just double your gross sales... and double your refunds.

Let's see what the numbers look like using the worst of the above cases. Okay, so you double your gross, which now means you take in $4,000 and you double your refund rate (from 10% to 20%) which is $800 in refunds and you still have to subtract the $1,000 for the cost of advertising. That means you've now got $2,200.

Here's another thing that, from my exalted guru status I firmly believe:

$2,800 Is Better Than $800

Now let's take an even worse case scenario. Let's say using the 30-day hold increases your sales by 50% but triples your refund rate. In this case, you will have gross sales of $3,000 minus $900 in refunds minus $1,000 for advertising. That leaves you with $1,100.

So, as you can plainly see, using dismal figures like this worst case scenario, you still have $1,100... which... at least to my befuddled brain... is better than $800.

Consider this fact: I have been in direct marketing since just before George Washington was elected the first president of the United States. And in all that time, I have never known anyone who used the 30-day hold to go back and start doing business again without the 30-day hold.