This is a very important question, and is usually difficult for business owners and marketing managers to answer. We can answer this question; it just takes a little discipline. There are 3 main factors to answering this question:
1) Knowing Your Acquisition Cost
2) Measuring the Leads Generated from a Campaign
3) Tracking Your Conversion Rate on Those Leads
Knowing Your Acquisition Cost
First, what is your average sale? Really think about the average. Out of 20 sales, what is the average? Next, what is your Average Gross Margin on a sale? What is left after Variable Costs on average? Now that we know our Average Gross Margin, we can determine how many sales we need to break even on a campaign. But wait, there is more… We also need to understand the lifetime value of your customers. So, on average, how many times does a customer buy from you? And, how many years do they come back for? Now you can begin to understand what a new customer is actually worth to you, which means we can understand how many new customers we need from a given campaign.
Measuring the Leads Generated from a Campaign
We touched on this subject last month. There are a variety of ways to measure the leads brought in from an advertisement. You can visit our blog at http://intriguemediacanada.blogspot.com/ if you want to read up on ways to do this.
Tracking Your Conversion Rate
Okay, let’s say that you are spending $2,000 on an ad campaign. Your Average Gross Margin is $200 and Customers, on average, buy from you once a year for 2 years. So, we know that you need 10 new customers to break even in your first year and receive a 100% return in the second year. Let’s pretend we want to break even in the first year. That means we need 10 new customers. If our advertising campaign brings us 20 leads, we know that we need a 50% conversion rate. If we track who comes in from the campaign and who buys, we will see our conversion rate. If it is lower than we need, we can work on improving it.
Understanding these three factors will bring you one step closer to answering the question, “Do Your Ads Make Your Money?”
Tuesday, June 29, 2010
Friday, May 14, 2010
4 Simple Ways to Measure Your Ads
1) Use a Different Phone Number
This can be a very cost effective and straight forward method to evaluate your ads. All it takes is a phone call to your phone supplier and they will set you up with a new number that uses a separate ring tone when someone calls you.
The investment is usually around $12/month for a separate number on the same line. This way you can tell that anyone that calls that number is coming from your ad.
2) Use a Landing Page with a Unique URL
This can also be a very cost effective method for tracking your ads. By creating a separate landing page url for your ad, you can determine what type of response your ad is getting with consumers.
The key here is to have some sort of Website Traffic Analytics set up. We always recommend Google Analytics. It is free and easy to use. If you don’t know how to get that started, give us a call and we can help you.
3) Use a Survey or Questionnaire
This can be laboursome but can also offer the most insight into the effectiveness of your campaign as well as provide you with a chance to gather more information about your customers.
4) Use a Compelling, Unique Offer
This can work, but is not always the most effective. One thing is for sure, if anyone comes in asking for the offer, you know you are getting response. The key here is to test different offers over time and try to hone in the ones that bring the best response.
Once you have identified the top two offers, invest in a larger ad spend and drive traffic to your business.
This can be a very cost effective and straight forward method to evaluate your ads. All it takes is a phone call to your phone supplier and they will set you up with a new number that uses a separate ring tone when someone calls you.
The investment is usually around $12/month for a separate number on the same line. This way you can tell that anyone that calls that number is coming from your ad.
2) Use a Landing Page with a Unique URL
This can also be a very cost effective method for tracking your ads. By creating a separate landing page url for your ad, you can determine what type of response your ad is getting with consumers.
The key here is to have some sort of Website Traffic Analytics set up. We always recommend Google Analytics. It is free and easy to use. If you don’t know how to get that started, give us a call and we can help you.
3) Use a Survey or Questionnaire
This can be laboursome but can also offer the most insight into the effectiveness of your campaign as well as provide you with a chance to gather more information about your customers.
4) Use a Compelling, Unique Offer
This can work, but is not always the most effective. One thing is for sure, if anyone comes in asking for the offer, you know you are getting response. The key here is to test different offers over time and try to hone in the ones that bring the best response.
Once you have identified the top two offers, invest in a larger ad spend and drive traffic to your business.
Monday, March 1, 2010
3 Components to Writing an Ad
Target – Offer – Copy
The three components to writing an ad are written above in order of importance.
Target
The first part to creating any ad is making sure it is placed in front of a good target audience. No matter how good the offer and copy, if the ad isn’t in front of the right people, you will not get any response.
Offer
The next component that needs to be considered is the offer. You need to make sure that the offer is strong enough to make the targeted consumer take action. With an offer, you want to make it something that has a high perceived value, but doesn’t have a high cost to the business.
You can partner with a supplier to offer a product. A restaurant could partner with a local vineyard in order to promote a new local wine, and sell it at the restaurant for next to nothing. The ad could be "Come in for dinner during the week of March 10th through March 17th and receive a bottle of wine on us."You can also use a service as an offer. Delivery, installation, massages, evaluations, hair cuts and styles, etc. The idea here is to use something that has a low variable cost, but also a high perceived value.
Copy
The last component of any ad is the copy. You want to find the best way to communicate the benefits and why you are better than your competition with the copy written for your advertisement. The key is to have consumer oriented communication that follows the "WIIFM Rule" What's in it for me? Be sure to keep that in mind for your audience.
The three components to writing an ad are written above in order of importance.
Target
The first part to creating any ad is making sure it is placed in front of a good target audience. No matter how good the offer and copy, if the ad isn’t in front of the right people, you will not get any response.
Offer
The next component that needs to be considered is the offer. You need to make sure that the offer is strong enough to make the targeted consumer take action. With an offer, you want to make it something that has a high perceived value, but doesn’t have a high cost to the business.
You can partner with a supplier to offer a product. A restaurant could partner with a local vineyard in order to promote a new local wine, and sell it at the restaurant for next to nothing. The ad could be "Come in for dinner during the week of March 10th through March 17th and receive a bottle of wine on us."You can also use a service as an offer. Delivery, installation, massages, evaluations, hair cuts and styles, etc. The idea here is to use something that has a low variable cost, but also a high perceived value.
Copy
The last component of any ad is the copy. You want to find the best way to communicate the benefits and why you are better than your competition with the copy written for your advertisement. The key is to have consumer oriented communication that follows the "WIIFM Rule" What's in it for me? Be sure to keep that in mind for your audience.
Wednesday, February 3, 2010
Existing Demand vs. Latent Demand - Advertising in Guelph, Kitchener, & Waterloo
Making the distinction between existing demand and latent demand is very important when creating an advertisement. Existing demand is exactly that; people that already consume your product or service, whether it is from you or a competitor. Latent demand refers to consumers that have either decided not to spend their money on the product or service or do not understand why they need it.
From a marketing point of view, making this distinction is critical in ad creation. Speaking to someone who already consumes your type of offering means that we need them to come to you instead of someone else, or come back sooner than later. This means that the message needs to cater to that purpose. An offer or sale might work, a packaged offering might be an option, and other ideas can be explored.
If the ad is aimed towards latent demand, then we need to emphasize how your product or service will benefit the potential consumer. Showing people what life would be like with your product or service, and how it solves problems that they experience. The idea here is that we need to demonstrate why they need to spend money on your offering. Whereas existing demand does not need convincing, they need persuasion to come to you and not someone else.
Making the distinction between existing demand and latent demand is very important, so be sure to take it into consideration for all of your ad campaigns.
From a marketing point of view, making this distinction is critical in ad creation. Speaking to someone who already consumes your type of offering means that we need them to come to you instead of someone else, or come back sooner than later. This means that the message needs to cater to that purpose. An offer or sale might work, a packaged offering might be an option, and other ideas can be explored.
If the ad is aimed towards latent demand, then we need to emphasize how your product or service will benefit the potential consumer. Showing people what life would be like with your product or service, and how it solves problems that they experience. The idea here is that we need to demonstrate why they need to spend money on your offering. Whereas existing demand does not need convincing, they need persuasion to come to you and not someone else.
Making the distinction between existing demand and latent demand is very important, so be sure to take it into consideration for all of your ad campaigns.
Tuesday, December 29, 2009
AIDA - A Great Formula for Successful Advertisements
Here is a simple formula to consider that might help when putting together and advertisement in any medium.
AIDA
A – Attention
I – Interest
D – Desire
A – Action
The first step to creating an ad is getting the reader’s attention. This is crucial to the success of an ad. If you can’t get their attention, then your ad will flop.
Once you have got their attention, you need to get them more interested in the product or service that is being offered. You want to start talking about benefits. People want to know what is in it for them.
You then want to build on their desire. You can do that by playing on emotions. The basic emotions are to be more loved, accepted, respected, or to have improved self-esteem. This is the stage where you can touch on the frustrations that people have with the particular product, service, or industry being advertised. You then want to build the vision of what life would look like if the frustrations were gone.
It is then time to get the reader to take action. This comes at the end of the ad. You need to tell them exactly what to do to fulfill that desire. It is very important that you make it easy. Give step-by-step instructions and do not assume the reader will know what to do.
Focus on this simple formula and your ad will have a great chance for success.
AIDA
A – Attention
I – Interest
D – Desire
A – Action
The first step to creating an ad is getting the reader’s attention. This is crucial to the success of an ad. If you can’t get their attention, then your ad will flop.
Once you have got their attention, you need to get them more interested in the product or service that is being offered. You want to start talking about benefits. People want to know what is in it for them.
You then want to build on their desire. You can do that by playing on emotions. The basic emotions are to be more loved, accepted, respected, or to have improved self-esteem. This is the stage where you can touch on the frustrations that people have with the particular product, service, or industry being advertised. You then want to build the vision of what life would look like if the frustrations were gone.
It is then time to get the reader to take action. This comes at the end of the ad. You need to tell them exactly what to do to fulfill that desire. It is very important that you make it easy. Give step-by-step instructions and do not assume the reader will know what to do.
Focus on this simple formula and your ad will have a great chance for success.
Wednesday, December 23, 2009
The 4 P's of Marketing are out, the 4 C's are in.
4 C’s of Marketing.
Anyone who has ever taken a marketing course would know of the 4 P's of marketing...
Product, Place, Price, and Promotion. These four aspects were created in order to simplify how to sell a product or service. And for years it worked well, but times have changed and so have consumers.
Below is the 4 C's of Marketing and how they relate to the 4 P's.
1. Customer Value (Product) –
'Product' was based on what the seller offered, 'Customer Value' refers to how the product benefits from the buyer's point of view.
2. Cost to Customer (Price)–
'Price' was based on the price of the product or service, how it related to competition and cost, 'Cost to Consumer' refers to every and any cost incurred during the procurement of the product/service (shipping, time to get to the store, parking, gas, etc)
3. Convenience for the buyer (Place) –
'Place' referred to the location of where something would be sold, 'Convenience for the Buyer' refers to how easy it is to find information and purchase. With e-commerce available, catalog sales, delivery services, some businesses (like amazon.com) barely need a store or 'place' at all.
4. Communication (Promotion) –
'Promotion' referred to how one would tell a market about a product/service, 'Communication' is a dialog, a two way communication. Market research, social media, and formalized customer feedback gives businesses a chance to listen to their customers and begin to try and better understand their needs.
The idea here is that businesses have shifted or are shifting to a much more consumer focused orientation in order to maintain a viable business model and market products and services successfully. So, I ask you... do you know what your customers want? Have you asked them? or even better, do you give them a chance to tell you?
Anyone who has ever taken a marketing course would know of the 4 P's of marketing...
Product, Place, Price, and Promotion. These four aspects were created in order to simplify how to sell a product or service. And for years it worked well, but times have changed and so have consumers.
Below is the 4 C's of Marketing and how they relate to the 4 P's.
1. Customer Value (Product) –
'Product' was based on what the seller offered, 'Customer Value' refers to how the product benefits from the buyer's point of view.
2. Cost to Customer (Price)–
'Price' was based on the price of the product or service, how it related to competition and cost, 'Cost to Consumer' refers to every and any cost incurred during the procurement of the product/service (shipping, time to get to the store, parking, gas, etc)
3. Convenience for the buyer (Place) –
'Place' referred to the location of where something would be sold, 'Convenience for the Buyer' refers to how easy it is to find information and purchase. With e-commerce available, catalog sales, delivery services, some businesses (like amazon.com) barely need a store or 'place' at all.
4. Communication (Promotion) –
'Promotion' referred to how one would tell a market about a product/service, 'Communication' is a dialog, a two way communication. Market research, social media, and formalized customer feedback gives businesses a chance to listen to their customers and begin to try and better understand their needs.
The idea here is that businesses have shifted or are shifting to a much more consumer focused orientation in order to maintain a viable business model and market products and services successfully. So, I ask you... do you know what your customers want? Have you asked them? or even better, do you give them a chance to tell you?
Monday, November 30, 2009
Market Research
Market Research, that is what Coca Cola does when they launch a new drink. We are a small company, we cannot afford to hire Ipsos Reid or Neilson to do research for us! WRONG! Wrong in a way that you DO NOT NEED to hire research pros. You can do it yourself with a bit of creativity, energy and discipline.
Here is a success story about small business market research. A true story. A woman in a mid-size town noticed a beautiful store for rent. 1,400 square feet. Nice size. Best location in town, right on Main Street and next to a very busy café. The woman has an interest in fashion, kids are in university, husband away for work, yes, my own store would be great. A shoe store, yes, that is it. I was talking to all my girlfriends, they were excited, yes, we want a great shoe store in town. Done deal. ……. Can I live off my girlfriends buying shoes from me?, forgodssake, I need to sell 2,000 pairs to break even….. Will “normal” people buy shoes from me? There is a national chain store in town, there is Wal-Mart (yeah, we are better than them), there is another independent store that seems to be doing well….do people want a shoe store? Would be nice to know before spending umpteen thousand dollars in inventory. Main Street is very busy on Saturdays. Folks out there shopping. Hmm, why not ask them, the future customers?
The lady prepared a simple questionnaire, only 4 questions. Her daughter and 2 friends went out on Main Street and asked 150 passer buys, right in front of the proposed store, these 4 questions. It turned out….not many people wanted a shoe store but 64% wanted a bakery! Well, apart from fashion, the woman is a hobby chef and has interest in good food. To make the story short, she opted for a bakery. It has been a success. Actually, people say we needed a bakery in town. No regrets about the shoe store.
This is an example, how a small business owner conducted a very simple market research – yielding dramatic results. And the cost: $ 0.00.
Of course, you are not opening a new store every year, but every business needs some kind of market research from time to time. You need to know your customers - who are they? What do they like? Where are they from? How do they rate your business? Don’t you think this is crucial, vital to your business?
Here is an example of what you can do: An ongoing issue for all small businesses is advertising. How do I spend my dollars wisely? How, where should I advertise? Research can help! Your existing customers can be a wealth of information; start a simple routine on cash check out and ask them for their postal code. This will tell you where they live. Trivial. Let’s now assume you offer a unique product for which people would not mind travelling a bit. Advertise this product in the neighbouring town, say in the local paper of this town. As you continue asking for customers’ postal codes, you will (hopefully) notice, that you now have indeed attracted customers from the neighbouring town. Proof that your advertising works. Your cost: $ 0.00.
In short, be creative, think about what you need to know and come up with simple solution to find out. It is easier than you think. Be creative. You won’t need Ipsos Reid or Neilson for that!
Here is a success story about small business market research. A true story. A woman in a mid-size town noticed a beautiful store for rent. 1,400 square feet. Nice size. Best location in town, right on Main Street and next to a very busy café. The woman has an interest in fashion, kids are in university, husband away for work, yes, my own store would be great. A shoe store, yes, that is it. I was talking to all my girlfriends, they were excited, yes, we want a great shoe store in town. Done deal. ……. Can I live off my girlfriends buying shoes from me?, forgodssake, I need to sell 2,000 pairs to break even….. Will “normal” people buy shoes from me? There is a national chain store in town, there is Wal-Mart (yeah, we are better than them), there is another independent store that seems to be doing well….do people want a shoe store? Would be nice to know before spending umpteen thousand dollars in inventory. Main Street is very busy on Saturdays. Folks out there shopping. Hmm, why not ask them, the future customers?
The lady prepared a simple questionnaire, only 4 questions. Her daughter and 2 friends went out on Main Street and asked 150 passer buys, right in front of the proposed store, these 4 questions. It turned out….not many people wanted a shoe store but 64% wanted a bakery! Well, apart from fashion, the woman is a hobby chef and has interest in good food. To make the story short, she opted for a bakery. It has been a success. Actually, people say we needed a bakery in town. No regrets about the shoe store.
This is an example, how a small business owner conducted a very simple market research – yielding dramatic results. And the cost: $ 0.00.
Of course, you are not opening a new store every year, but every business needs some kind of market research from time to time. You need to know your customers - who are they? What do they like? Where are they from? How do they rate your business? Don’t you think this is crucial, vital to your business?
Here is an example of what you can do: An ongoing issue for all small businesses is advertising. How do I spend my dollars wisely? How, where should I advertise? Research can help! Your existing customers can be a wealth of information; start a simple routine on cash check out and ask them for their postal code. This will tell you where they live. Trivial. Let’s now assume you offer a unique product for which people would not mind travelling a bit. Advertise this product in the neighbouring town, say in the local paper of this town. As you continue asking for customers’ postal codes, you will (hopefully) notice, that you now have indeed attracted customers from the neighbouring town. Proof that your advertising works. Your cost: $ 0.00.
In short, be creative, think about what you need to know and come up with simple solution to find out. It is easier than you think. Be creative. You won’t need Ipsos Reid or Neilson for that!
Thursday, November 19, 2009
Local Television - Is it staying or going?
Check out this article from the Kitchener Record.
It will create a little clarity around the subject of Television Networks looking for more money from people.
http://news.therecord.com/Opinions/Editorials/article/630488
It will create a little clarity around the subject of Television Networks looking for more money from people.
http://news.therecord.com/Opinions/Editorials/article/630488
Maximizing & Simplifying Your Message
Far to often we see video and advertisements that suffer from a condition known as "Information Overload". Many advertisers and businesses try to force large complex messages into fast and overbearing ads. If there is one thing we have learned at Intrigue Media, it's that simplicity and minimalism are great tools in making amazing advertisements. Most people believe that attaching every word, image, and animation they want into an advertisement gives the general public a great deal of information to take in. However, it's more common for such a busy advertisement to switch off the viewers interest. The goal in simplifying your message is to give the audience a bite sized amount of information that is both easy to remember and interesting to look at. No one wins from a complex advertisement that nobody will remember or care to watch.
Planning
Planning is the first step to creating sophisticated and effective local marketing campaigns. Implementation and Evaluation are the second and third components and tie back into planning once completed. Marketing must be viewed as an integral strategic component of every business in order to compete with national brand names and million dollar advertising budgets.
Monday, November 16, 2009
Message, Medium, & Demand
The three variables to any advertisement are the Medium, the Message, and the Demand for your products or services. The ideal advertisement has a strong medium with a strong message on a market full of demand. Obviously, this is not easy. The goal is to do the best you can and evaluate your initiatives in order to better understand how to make your advertisements better in the future. Business is a long term practice. Overnight success does not happen (most of the time). Time, persistence, energy, strategy and demand will turn into success over the course of years. If an ad campaign fails, learn from it, try to understand why, and do not allow it to happen again.
When advertising in a paper or magazine remember a few things:
When advertising in a paper or magazine remember a few things:
1) The top right corner is the best place for your ad. People see the top right corner first as they turn the page, and gives you a chance to grab their attention.
2) The bottom right corner is the next best place. This corner is the anchor of the page and the final place the eye looks to before turning to the next page
3) Always avoid the gutter. The gutter is the inside of either page bordering the spine of the publication. Often your ad will be lost or bent, making it difficult to read.
Remember, people are lazy. When something is difficult to read, it does not get read.
1) The top right corner is the best place for your ad. People see the top right corner first as they turn the page, and gives you a chance to grab their attention.
2) The bottom right corner is the next best place. This corner is the anchor of the page and the final place the eye looks to before turning to the next page
3) Always avoid the gutter. The gutter is the inside of either page bordering the spine of the publication. Often your ad will be lost or bent, making it difficult to read.
Remember, people are lazy. When something is difficult to read, it does not get read.
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