In my career I have owned and operated publishing companies from Yellow Pages to Magazines, Direct Mail companies, Web Building and Hosting companies, ad agencies, an ad monitoring company and an SEO and Ad Word company.
But more importantly I have purchased millions of dollars of advertising in just about every medium available to promote my own businesses.
So I can give you the perspective of both the provider of advertising and the consumer of advertising.
Thus is this series I am going to provide my insight on how to begin the advertising process to how to use each medium to your best advantage.
Today we are starting with the basics. What to do before you make that advertising purchase. How to avoid mistakes, in advertising that can be costly and ineffective.
So let us begin with the basics you need to decide before moving forward with your marketing and advertising campaign.
Take some quiet planning time and sit down and ask yourself and then answer, the following:
- Who is my customer? And this question has many legs. Is my customer driven by demographic, such as age or income, by status such as homeowner or renter, local, regional or national? Are they gender based? The idea is to identify who you are trying to reach? Once you know the answer to this you can ask the right questions of the representative of the medium you are using. But the basic question will be, will this medium reach the targeted customer I am after.
- Is there a list I can buy that gives me access to the specific target I am after? Research this, if yes, this may prove invaluable.
- Do I have in place the people and systems to service new customers once my advertising brings them in? Keep in mind, the advertising is designed to get them in; it is your responsibility to make them want to come back. Simple things like who greets them initially are often left to chance. I once owned a call monitoring business that recorded all calls from advertising vehicles, and when I listened to these call for my clients, it amazed me how unprepared the person answering the phone was to entice the customer to follow through with a sales visit. In many cases the lowest paid and least trained person in the company was the first contact, costing the business untold sales opportunities. Do you have a follow up system in place to make second calls? Are you prepared for a spike in volume so as not to chase away the business?
- How much do I have to invest in advertising? Believe me all advertising works if you are willing to commit enough dollars into enough frequency. But this is the challenge. The cost may be prohibitive, but buying advertising that you do not commit enough dollars and frequency into is one of the biggest mistakes businesses make. Buying one ad in the newspaper is a waste of money; you need about 20 of them in successive weeks to make an impact. Buying one radio spot is again a waste; it has to be heard 27 times to be remembered. Buying SEO or Ad Words and sending people to a website that is not set up to convert them to a contact, is foolish. Traffic to a site is not the intention, conversions to sales is. But that will be a whole blog in the series.
- What is my message, is it value, is it superior service or product. Know what it is you want to sell before nilly willy creating ad copy.
- Who is my competition and what are they offering in their ads. Do I have to compete with the offer, how am I different? What advertising vehicles are they using?
- What do you read, listen to personally or pay attention to the advertising in, in your local area. Your customers are not likely different than you.
- What is a new customer worth to me? This is such an important piece of information. Some examples: An Oil Change service will change the oil of a car about 4 times a year; their typical customer will own two cars. So how much is the oil change times four times two and that is what a customer is worth? One new customer generated by your advertising that you convert to a repeat and loyal customer is worth about $300 a year. How many do you have to get to make the advertising worth the investment? You could go further and determine your cost to provide that $300 of service and calculate the profit and use that as the number to measure the return on investment.
- This works with any business, take a restaurant. How much is the average ticket, how many times a month does a regular customer visit, do they come alone or with friends. Figure all this out and you know what a new customer is worth to you in terms of either revenue or profit. In this case, if the average ticket is $10 and they come twice a month and bring one friend each time, that customer is worth about $480 per year, now how many years will they be customers, all generated from that advertising.
- A dentist as another example, the average new patient is worth almost $3,000 a year.
- An Insurance agent’s new customer is worth about $75,000 over the life of the relationship.
Written by Anthony Wunsh
Welcome Marketing, Inc
Distributor of Town Hall Guide