Advertising and the small business.
Discussion
groucho said:
spikeyhead said:
Providing that your business model and plan are accurate, then as much as is in the model
HTH
Pack it in! HTH
It may well be worthwhile directing some of your resources from your advertising budget into a business model.
Say you spend £10k on advertising it will generate £100k of sales.
Spending £50k on advertising will give you £700k of sales. However it will also wreck your cashflow and leave you paying stupidly high levels of interest on the working capital required to support that growth rate. You'll also have a nervous breakdown from trying to run a business that's growing that quickly.
So somewhere, there's a right level to spend on advertising. Its very dependent on the business circumstances and thats why people put business models together.
Alternatively I could have just said that 2.381% is perfect for every business, which would have been better received and far less helpful.
groucho said:
What percentage of net profit would you say is acceptable to spend per annum on advertising?
The best answer would be as little as necessary. A 3k ad in Evo might get you the same sorts of results as a few ads in the PH classifieds, assuming you were a PHer in the auto trade...And assuming the PH classifieds gave a far better return than the magazine (which for some, it did) then you could slice a 3% figure into hundredths for a more accurate/correct answer, in that instance.
iirc, I think I heard that 3% of the gross was the average spend though... But what most businesses fail to understand is that they should be spending 50% of the gross on their website
Advertising should be free.
First of all find a large, well populated internet forum (check).
Then, make a post about your business (check).
Remember not to post in the lesser populated business forum, but in the main discussion forum (check).
Make sure your profile has a link to your company website (doh!)
First of all find a large, well populated internet forum (check).
Then, make a post about your business (check).
Remember not to post in the lesser populated business forum, but in the main discussion forum (check).
Make sure your profile has a link to your company website (doh!)
groomi said:
Advertising should be free.
First of all find a large, well populated internet forum (check).
Then, make a post about your business (check).
Remember not to post in the lesser populated business forum, but in the main discussion forum (check).
Make sure your profile has a link to your company website (doh!)
See, if I was doing what you implied I would have a link in my profile. Not a bad idea though. First of all find a large, well populated internet forum (check).
Then, make a post about your business (check).
Remember not to post in the lesser populated business forum, but in the main discussion forum (check).
Make sure your profile has a link to your company website (doh!)
It didn't cross my mind, I was just asking a question.
Grouch, go all the way http://www.pistonheads.com/members/remember/submit...
IMHO the spend should be linked to sales at about 8% overall. However I would include everything from signwriting a van to letterheads & cards etc. all within that figure.
Just as important to distribute the expenditure properly too. As a rule a 'campaign' once a quarter is more effective than an advertisement every week.
Just as important to distribute the expenditure properly too. As a rule a 'campaign' once a quarter is more effective than an advertisement every week.
Its not so much about the £ spend but the ratio of each part of the marketing mix.
Instead of one big pie, three smaller pies with recordable results is much better.
If you have a mechanism to see what volume of sales comes from which adverts then you know how to make your money work for you.
Instead of one big pie, three smaller pies with recordable results is much better.
If you have a mechanism to see what volume of sales comes from which adverts then you know how to make your money work for you.
groucho said:
groomi said:
Advertising should be free.
First of all find a large, well populated internet forum (check).
Then, make a post about your business (check).
Remember not to post in the lesser populated business forum, but in the main discussion forum (check).
Make sure your profile has a link to your company website (doh!)
See, if I was doing what you implied I would have a link in my profile. Not a bad idea though. First of all find a large, well populated internet forum (check).
Then, make a post about your business (check).
Remember not to post in the lesser populated business forum, but in the main discussion forum (check).
Make sure your profile has a link to your company website (doh!)
It didn't cross my mind, I was just asking a question.
I work for Yell and hear a mixture of results from customers I see. Some say it's the best thing since sliced bread and it makes them a fortune, others say it's crap and they got nothing.
Strangely though, the ones who know it works are the ones who answer their phone when I ring rather than letting it go to a fax machine - or worse, let it ring forever or "..one of the kids'll get it..". They're the ones who monitor their calls, know their conversion ratios, their costs, profits, target customers and catchment areas. They've got a handle on what their competitors are up to, and what's going on in their marketplace.
If you get it right, it can be brilliant for you.
Strangely though, the ones who know it works are the ones who answer their phone when I ring rather than letting it go to a fax machine - or worse, let it ring forever or "..one of the kids'll get it..". They're the ones who monitor their calls, know their conversion ratios, their costs, profits, target customers and catchment areas. They've got a handle on what their competitors are up to, and what's going on in their marketplace.
If you get it right, it can be brilliant for you.
Edited by Funk on Tuesday 11th March 22:47
groucho said:
What percentage of net profit would you say is acceptable to spend per annum on advertising?
Anything from 0% to >100% depending on the business! What industry are you in? If you're launching a new perfume you'll probably have to spend multiples of the first years income (probably won't even get a sniff of profit) on advertising, if you're running an established newsagent in a train station than you'll probably not need pay for any.
Advertising efficacy is one of the hardest things to quantify in business and much of it relies on gut feeling. If you're talking about a roofing business as your profile implies, don't be afraid to ask your clients where they heard of you.
Edited by rpguk on Tuesday 11th March 22:57
groucho said:
If you're talking about a roofing business as your profile implies, don't be afraid to ask your clients where they heard of you.
May I suggest a subtle but important change? Don't ask how people heard about you, but where they got your number from. It's a small change, but will reveal a very different result.My local Ford dealer asked me 'How did you hear about us?' when I booked it in for its first service.
"I've lived here most of my life, I know you're there," was my response.
"Ok, great," she said.
The conversation would've ended there had I not then told her I'd got their number off Yell.com. Even though I knew they were there, I still had no idea how to contact them to book the service.
This happens with recommendations as well, when someone says, "Oh, so-and-so recommended you..." Brilliant, but ask whether the person who did the recommending gave them the number.
It's finding out where they got your number that's critical, as without that they wouldn't be able to contact you no matter whether they knew of you/were recommended etc.
Edited by Funk on Tuesday 11th March 23:19
I haven't got time to post the full story but the comment from Funk about Yell is interesting as my hairdresser was telling me he got a very hard and aggressive sale from a Yell rep recently.
I don't buy the "it matters where they get your number from" issue - it matters where they heard about you more, if they don't hear about you they can't find your number anyway. Yell seem to be selling on the "where they got your number from" approach - presumably as it suits their stats a lot better than actual new clients.
When you're entry number 500 in a list of widget shops in an area they aren't going to find you.
Anyway - Groucho - whereabouts in Dorset are you - might need a new roof on an extension next year - West Dorset/East Devon border....
I don't buy the "it matters where they get your number from" issue - it matters where they heard about you more, if they don't hear about you they can't find your number anyway. Yell seem to be selling on the "where they got your number from" approach - presumably as it suits their stats a lot better than actual new clients.
When you're entry number 500 in a list of widget shops in an area they aren't going to find you.
Anyway - Groucho - whereabouts in Dorset are you - might need a new roof on an extension next year - West Dorset/East Devon border....
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