Advertising

Becker

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Northwest Ohio
I'm curious as what others feel is a smart percentage of gross sales to spend on all forms of advertising, including the phone book, radio, print, TV, etc.
 
10%
 
Before you can allocate an advertising budget you need to define why you are advertising…….

Why are you advertising!!!!.......for new customers …..existing customers……..new target market…….new product promotions……..etc. etc.

For example I have estimated that for my new business (Not Picture Framing) I will need to spent on average about euro €200 to €300 to get a new customer my target is about 50 new customers in the first year…..€10,000 to €15,000……and then I need to support advertise the customers that came with the business…..I’m hoping that a few direct mail shots/telephone cavassing and sales call will be sufficient for this ….say about €4,000 to €5,000

You need to try and work out how much a customer is going to be worth and then you can stab a guess at a "Customer Lifetime Value" (CLV) then you can decide on how much to spend on advertising and from that you can gain some insight to how effective your advertising is….


Dermot
 
A small percentage is anything under 6% - in my opinion, I'm under the impression 10% would be close to avg , maybe even high. I think 6-12% would be the range 90% fall in.
 
I think there is probably not a single item that most framers would agree upon than the biggest misuse/inneffective dollars spent are those we spend on advertising

We have neither the resources (capital or ability) to effectively craft an successful campaign.

You get pockets of successful stories that tend to be driven more by ego than fact, but on balance, we tend not to be very good at this stuff. Couple that with the lack of bucks we put into it, and it isn't a very pretty picture

Show of hands time:

Raise your hands if you wish you could get every penny back that you spent on ineffective advertising.

Give me the same 10% of sales that you wish to budget for ads,add to that the monies you spend on ineffective Business Promotions and let me put that into a better location. I will personally guarantee a larger sales increase
 
It's a familiar problem for us all and I appreciate your time. This is our third year and we are slightly above the 10% figure but that will most certainly come down in 2006. Thanks to all of you.
 
Originally posted by Bob Carter:

Give me the same 10% of sales that you wish to budget for ads,add to that the monies you spend on ineffective Business Promotions and let me put that into a better location. I will personally guarantee a larger sales increase
Believe me Bob, you do not get a more resounding "Amen" from me here in the choir. But, what do you do when you can't relocate? How do you know how to spend your "advertising" dollars then? I've got to earn my way out of this ill suited location, short of burning the place to the ground I have to do something to get them through the door.

I am just this month gathering another burst of steam(I'm like a cock roach and Cher, I refuse to die)and picking up the pieces and giving it one more go, I have some money allocated to advertising but I don't know what approach to take this time...........I'm figuring on a 10% budget for advertising but I am on a very slippery slope(as you know) and I cannot afford to throw good money after bad any longer.

So far I have come up with paperclipping a dollar bill to a thousand business cards and wait for a windy day and drop them from a tall building. Bet I'd get as good a results as more traditional methods.

After almost four years(eek!)I do get the fact that I simply do not have the budget required to get the word out there via advertising.

[ 07-18-2005, 05:56 PM: Message edited by: Emibub ]
 
Kathy-Great point and that's what I mean. Often times, we are just blowing money away

I hope someone might have a silver bullet answer-heck, we might even use it, too

I realize that what we do won't work for most. I also surmise that what most others suggest may not either.

Either way, the dollars are spent and there tends to be precious little to show for it.

I guess if there is a point, it might be that instead of setting any arbitrary budget for monies that you have to spend, most would be wise to not spend it at all.

You too often hear these fixed percentages (6%, 10%, etc) Starting today make a file of all the ads you see for the next 30 days. Then compare those ads to the numbers of shops in your market. I'll bet that you won't see 10% of the shops participating, much less 10% of the dollars spent on framing in ads

I just hate to see framers spend tough earned monies on stuff, that for most, is simply ineffective just because somebody says you ought to spend so much percentage on advertising.

How often do we make decisions based on the fear of criticism for not doing what is expected?
 
Originally posted by Bob Carter:

Raise your hands if you wish you could get every penny back that you spent on ineffective advertising.

shrug.gif


That would be me with both hands up.


The next time I think about advertising in one of the local newspapers, I have decided that I will set fire to that money. That way, just maybe I could get a TV news crew here to watch the 'crazy framer' burning his money again.


Location wins hands down.


Kathy

The only real success I have had has been with direct mail at both locations.
 
Well, I will say, I have not spent one dime on advertising the past 6 months because I had some catching up to do and I did not have the money to spend. My sales are staying with last years, in fact I am even up a bit.

I have continued to send postcards with reminders and offers to my existing customers and I get a good response to those with the exception of the one for June. Bad timing I think.

I'm getting the feeling I can't rise above it unless I move, and I can't move unless I rise above it. Anybody read or see "Catch-22"?
 
We spend about 3-4% on advertising. Sometimes even less. That is not to say we don't promote our business we just do it in another way. We are grass roots guys. Sure we would love the big fancy campaign but it just aint gonna happen for a while.

We do some print about 2 small to med ads a month in the local paper and run on the town cable bulliten board. If your town has this I would suggest trying it. For us it is short money and we hear from people that they see our "commercials" on TV.

The way I see it, we are our best form of advertisement. So we just go do it.
 
Whatever you decide you can afford, if you can not afford to saturate it, keep looking. By saturate, I mean do the same thing as the big guys. Advertise in the same medium every week, every day, always be there.

The best way to throw your advertising dollars away, is to try a medium just a few times. You must stick with it. If all you can afford is the church bulletin. make sure you never miss an issue. This is why the yellow page ad will work for some of you, because you are always there. If you put out a direct mail, do it every month.

Advertising is like any well run business, it must be consistent. The idea is more to keep your name out there. People rarely have something to frame, when they do, you want your name to come into their heads. This is the biggest reason, when you are choosing a name for your business, keep it simple, and easy to remember.

Even when you advertise a coupon every week in the local shopper news, it does not mean it is going to work every week, or even every month. The way it does work is, it keeps your name out there.

Advertising is like the stock market, it takes time and money, and it is not for the faint of heart. (That's fancy talk for scaredy cats)

John
 
As a business grows, may the percentage decrease?

If it were put into location as a percentage of sales then do we keep moving if expansion is not possible? Or is this the point at which we open more stores?
 
I sold cars for a short period (like 2 weeks... I HATED it!) but I remember there was one woman there who used business cards. Everywhere she went she passed out business cards. Every grocery store line. Every bank drive-through. Every power bill. She would hand out 500 cards a month. Within a year, she was seeing potential buyers by appointment only, and she was busy most of the time. To steal from Vivian, staple a complimentary picture hook package to each of those business cards. It certainly is a cheap promotion!
 
In my somewhat limited experience, the best "advertising dollars" are spent on gaining customer loyalty. Loyal customers are your best advertising medium. Not only will they come back without even thinking about it, but they will RAVE about you to all their friends, relatives and colleagues. There is no better reference than from one who has nothing to gain by it. When I say "our products are the best" it means one thing, but when my customer says it, it means something a whole order of magnatude more.

So, how do you gain customer loyalty? There are lots of things you can do, but the underlying principle is the same: Treat them the way you would want to be treated.

This is not to say you shouldn't advertise, or you may not have any customers to become loyal...
 
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