How To Track Sales,Revenues, Adword Cost Accurately For Inbound Campaign Like Spectrum, Direct TV And Others On Daily Basis To Predict Profit and Loss

How To Calculate Over Head Monthly Expense:

It does sound very simple, that it might not be a hard task calculating break even of a center. Surprisingly very few center actually know there math. What I mean is that some center would run 5 days a week, some would run 6 days a week. Usually a center would be making sales of several carrier, each carrier would have different install rate, each unit of sale might be paid differently, charge back would be spread up to 180 days. Call center guys are simple guys they are not data scientist.

Because of these factors some times I used analogy of this type of operations to dairy operations. Until a cow is milking the equation would be different, when it would be dry, the whole equation would change.

Wait, dairy, farming with inbound center that is based on digital marketing whats the comparison. Well, usually the center would calculate $300 invested in Adwords, $450 worth of sales made. That is it. Did they made profit day or not. How to factor in different units of sale with different revenues.

Lets take an example of over head monthly expense and then take out daily expense with an example. Lets consider 5 agents center.

5 agents salary/month= $300*5=$1500

Voip Charges+ Dialler= $300

Petty Cash= $150

Internet= $150

Office Rent= $400

Utilities= $200

Total=$2700/month.

If a centre is working 5 days a week, lets assume there are 22 working days= $2700/22=$123/day

So keep in mind every day on top of marketing cost, each working days over head expense is $123/day. Each day that you stop your operations you gotta cover $123 for the previous day.

So we would be coming to this excel sheet, later you need to add/subtract from your revenues every day, later calculating compound for monthly, quarterly and so on.

How to Factor in Different Carrier Units, Cancellation Rate and Charge Back.

Look at the snap shot above. As an example Sales column refer to Spectrum Sales. In Sales Section we have entered Triple Play as TP differently, double play as Dp as differently.

The whole idea is break down all sales separately, if you are paid differently. For example if Low Risk Direct Tv customer pays differently than medium risk enter it differently.

Same goes for all other carriers. If you are paid differently, enter it differently.

How To Adjust Revenues Lost Because Of Cancellation And Charge Back.

Since the charge back could be spread to six months and cancellation rate different for each carrier, we need to take into account both of these factor.

If you are established center you would know your install rate and charge back percentage.

If you are a new center, look around a similar center in quality as of yours and ask them what charge back and cancellation rate you are getting. And as you accumulate data, use your actual figure.

Lets take an example. Suppose you get paid $200 for Triple Play for Spectrum and lets say your install rate is 88% and charge back percentage is 20%.

Lets do grade 4 math $200*0.88*0.80=$140.80

So each Triple Play is not worth $200 but $140.88 in this case. So, please do not assume if you made 2 triple play that day your revenues would be $400 instead it would be $281.76.

How To Enter Ad words Cost the Elephant in Room.

Although this is straight forward one would know the money spent on marketing and call landed/taken, but its better to go in depth so that you can have more data and better decision to make.

If you are running in house marketing and call only ad,all clicks would not be converted to calls. So enter clicks from Google Ads, Calls from dallier(do use number filter if same customer called more than once on a day), calculate click to call ratio and finally the landed call.

How It Comes All Together

Now you have your daily expense on per day basis(calculated on basis of working day).

Revenues calculated from sale taking into consideration the cancellation and charge back.

You can calculate revenue generated per call or per agent.

You can calculate close rate

Above all you would know how many calls do you need at a given close rate to break even or make a profit of $xyz.

Put everything in one consolidated excel sheet/CRM.

You may do it in whatever you want. If you are like me, you can put everything on excel sheet, which you can also upload into your website,as Excel sheet/CRV is also Database, or may use CRM.

Data is everything. Trick with data is start small. If you would make a habit of tracking things properly and these things are from revenue basis, then it would be easier for you to focus on correct parameters.

Trust me people are buying calls from vendors and as per their guarantee of vendors, call centers are paying more to acquire customers than they are getting paid.

Vendors are not to be blamed. By ignoring simple math, a business might be going out of business and they would be thinking they are profitable.

As this business has a cycle, which is completed once the charge back period is over.

Although, this article was for telco sale, these math could be applied to any sort of pay per install basis or where lead approval is required.

Summary

It is important to know your per day expense and it is very simple, take into consideration working days.

Each unit of sale is paid differently, calculate it revenue, every carrier has a different charge back period and a cancellation percentage take into account.

Once you know charge back percentage,cancellation percentage you can calculate actual sale of cost in that month.

Once you have this information in hand it is easy to know how much per call and close rate you need to maintain.

Above all the deeper you go , you would see the actual area of business that you need to improve and not be delusional about your revenues and sales.