Scenario

You are reviewing a customer acquisition campaign that uses direct mail to drive new account signups. The team has a fixed cost per mailer, a target acquisition cost, and an expected lifetime value for each acquired customer. Leadership wants a quick view of the minimum response rate needed for the campaign to make economic sense.

Question

Calculate the breakeven response rate for a direct mail marketing campaign where each mailer costs $0.60, the acquisition cost target is $150, and the expected customer lifetime value is $400.