Marketing A reality Check for advertising |
Mr. Bob had a visit from a small business owner who owned a residential cleaning company. Her goal was "I would like to build my business. I have budgeted another $2,000 for advertising. How should I promote my business?"
Mr. Bob now asks out of those 39 new clients how many came as a result of your $2,000 of advertising.Mr. Bob had a visit from a small business owner who owned a residential cleaning company. Her goal was "I would like to build my business. I have budgeted another $2,000 for advertising. How should I promote my business?"Mr. Bob now asks out of those 39 new clients how many came as a result of your $2,000 of advertising.Mr. Bob asked her what she had done in the past. She replied that she had spent $2,000 on advertising. Mr. Bob asked did it work? There was a blank look that came over her face. "What do you mean by did it work? When you buy advertising there are no guarantees. You place an ad and hope that it works. It is just part of doing business." "Well, let's try and work out what results you got from the advertising. Let's determine how you measure what you do."
She said that she earned $45 a month from each client per month. She has 39 of these clients. Mr. Bob now asks out of those 39 clients how many became clients as a result of your $2,000 of advertising. She replies, "Oh that’s easy one client." Mr. Bob then asked, "Do you think that advertising is a good way to build your business."
She replied, "it does not but it is just part of doing business."
Mr. Bob asks, "Who says so?" Mr. Bob offers a thought. "You have 39 customer let's assume that the other 38 clients came from other than advertising. Where did they come from?" She said, "From friends, family, word of mouth and referrals!"
"So you did not have to spend any money on advertising to get these clients." So Mr. Bob says, "Let's look at how to best build you business. Is your greatest success is in gaining new customers by word of mouth referrals? YES So, what do you think would happen if you developed an incentive program for your clients?"
"What do you mean?" she asked.
"Well when one of your customers gave you a referral you said thank you and you then gave them a gift like flowers, a dinner out, a free cleaning. Up to the value of $45 or if it was a larger contract a larger gift. What do you think would be the result of that type of advertising?" "I would get lots of new customers."
"Does that answer your original question? " Mr. Bob enquired.
"YES." HomeworkLook at each of your important clients and see where they came from: referral, advertising, trade show... Did you invest wisely to get that client? How much?
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