Sometimes a formula just isn’t enough. A reader, who recently read the Figuring Break Even Point piece from a few years back, was confused about how to use the CPM formula. I responded, explaining — in words and figures — how to figure the break even point using his numbers. Analytical Bobette was pleased with the number-crunching distraction. Marketing Bobette wanted to elaborate. (There are more of us, BTW. Fortunately, the others were distracted elsewhere at the time.)
For all the talk of break even points and ROI, there are business- and profit-building activities that simply cannot be reliably captured in a formula. There are times when the formulas say “no,” but your sensibilities scream “yes!” How can you quantify the potential for pushing the envelope into an as-yet-undeveloped technology, one the customers cannot understand until they see it in action and no pricing and cost structures yet exist? Or acting from your heart, choosing to “pay it forward” when the numbers say there are better uses of your time? Even the future profits from doing something for nothing are fuzzy. Yet, there are times when — in truth — these types of activities have the highest break even points of all. The lesson: Numbers don’t tell the whole story. Pay attention to other cues when making marketing or other decisions.