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 Break Even Point

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#1PostSubject: Break Even Point   Wed 10 Feb 2016, 6:58 pm

For the benefit of those new into referral renting i want to discuss something that i think is helpful when it comes to it, the Break Even Point (BEP). This will serve as your guidepost in monitoring the activity of your rented refs, to know when to recycle or not to extend them.

So what is Break Even Point (BEP)?

BEP refers to the click average that you must receive from your rented referrals during the entire renting period in which you get even, no loses on your investment. If you know your BEP you can determine if you are losing or gaining on your investment. Please take your time to familiarize with the following formulas:

A. Fixed Value:  

 Each Referral Rent Cost / Rented Ref Click Value / Rent Days

B. Changing Value:

Upgrade Cost / Number of Rented Referrals / Referral Ref Click Value / Upgrade Days 
            
For standard members because your membership is free and you only invested on your rented referrals you will use formula A. Fixed Value.

For upgraded members, you should consider your upgrade membership cost and upgrade period costs and discounts together with the fixed value above so you fall in both A and B  and the formula is A + B.

I'd like to make it a point that renting referrals need careful management (recycling and extending) it is now up to you to devise your own strategies on how or when to recycle them depending on their activity.

I hope this will help in your rented referral management.

Happy clicking and many earnings.

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