How to define a budget allocation for analysis in direct marketing
I will be giving a training course in quantitative analysis and modeling in October to marketing executives in Montréal. Participants will ask me what portion of their direct marketing budget they should allocate to analysis. In other words, if I have a yearly budget of $500 000 for creative, printing, postage and lists, and want to start analyzing my data, what is a “fair” allocation of my overall budget for analysis/modeling? A mere 2% provides $10 000, barely enough for a thorough initial analysis… Five percent (5%) allocates $25 000 of the budget to analysis, while 10% sums up to $50 000; maybe to much? What do you think?