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Advertising Resource Center |
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What's the Score?
You may be aware that in a basketball game the assistant coaches keep an almost unending list of personal statistics for each player. Rebounds, assists, points, minutes played, etc. Why is that? Because they know that these individual statistics all add up to the bottom line. The final score. If they can achieve even a small incremental improvement in these individual statistics for each player this will have a compound affect on the final score. And of course, it helps them know which players to give the most playing time too. In marketing your business you should be just as disciplined. Which products and which ads and which media should you give the most playing time? Do you know? What's the point of designing and implementing an advertising campaign if you don't know if it worked or if it was better than the last one? What a waste. How do you know where the best place is to spend your advertising dollars? By tracking everything. Incoming calls, emails, walk-ins, website visitors, etc. Train yourself and your staff to always ask these questions. Where did they come from? How did they hear about you? Which ad did they call on? Here is an example: Let's say you place a classified ad in the newspaper at a cost of $135.00 offering a free report on your product. You could track the incoming calls in many ways (for instance by directing them to a free recorded message with a unique extension number or simply by asking them where they heard about the offer when they call). Let's say you receive 12 calls on this ad and 2 of them end up as completed sales. What is your cost per prospect? (Cost of Ad) / (Number of Calls) = Cost Per Prospect $135.00 / 12 = $11.25 Your cost per prospect is $11.25
(Number of Sold Clients) / (Number of Prospects) = Conversion Rate 2 / 12 = .17 (or 17%) Your conversion rate of prospects to sold clients is 17%
(Cost of Ad) / (Number of Sold Clients) = Cost Per Sale $135.00 / 2 = $67.50 Your marketing cost per sale is $67.50.
Which ad is performing better? What is your cost per prospect for this ad? (Cost of Ad) / (Number of Calls) = Cost Per Prospect $450.00 / 27 = $16.67 Your cost per prospect is $16.67
(Number of Sold Clients) / (Number of Prospects) = Conversion Rate 4 / 27 = .15 (or 15%) Your conversion rate of prospects to sold clients is 15%
(Cost of Ad ) / (Number of Sold Clients) = Cost Per Sale $450.00 / 4 = $112.50 Your marketing cost per sale is $112.50. Depending on your products and profit margin both of these ads may be performing well enough to merit continuation. However, based on this information we would want to look for other opportunities to expand our use of the classified ad first. This may seem a little basic but this information is extremely valuable and often overlooked. The outcome of most athletic contests is normally decided by a very small margin, sometimes by as little as tenths of an inch or hundredths of a second, missing that pass completion by half a step or missing one basket. One would suspect that most winners and losers in business are also determined by very small margins. Not giving that extra little bit of caring and customer service. Not having your presentation skills honed, not including testimonials with your sales information. Not having the most effective headline in your ad or not having a headline at all. And worst of all, not knowing which ads are working and which should be put on the bench. "If at first you don't succeed, try, try again. Then quit. There's no use being a damn fool about it." - W.C. Fields Shawn Meldrum has spent the last two decades marketing everything from almonds to landscape lighting. He currently specializes in marketing for mortgage brokers, loan officers and real estate agents. For free mortgage marketing articles and much more visit: http://www.MortgageMarketingTips.com/
MORE RESOURCES: Improving conditions have decreased corporate bankruptcies, but filings will continue in high-debt industries like real estate and media India's unexpected interest rate boost spurred speculation withdrawals of economic stimulus will curtail global growth India’s central bank will probably raise interest rates again next month as the first increase in two years is only the initial step in the battle against inflation, BNP Paribas SA and Standard Chartered Plc said. Wall Street analysts give their buy, sell, or hold views on 10 stocks in the news this week Crude oil tumbled the most in three weeks as the dollar strengthened against the euro, curbing the appeal of commodities as an alternative investment. The Fed must disclose documents identifying financial firms that might have collapsed without the largest U.S. government bailout ever, a federal appeals court said A House committee requested that Federal Reserve Chairman Ben S. Bernanke turn over documents related to Stephen Friedman’s purchase of Goldman Sachs Group Inc. shares while he was on the boards of both the Wall Street firm and the Federal Reserve Bank of New York. India’s central bank will probably raise interest rates again next month as the first increase in two years is only the initial step in the battle against inflation, BNP Paribas SA and Standard Chartered Plc said. Advanta Bank Corp., owned by the bankrupt credit-card issuer, was shut by regulators along with three lenders in Georgia as the number of failed banks this year climbed to 37. Goldman Sachs Group Inc. gave Chairman and Chief Executive Officer Lloyd Blankfein $9.8 million in total compensation for 2009, the firm said in a regulatory filing. The Federal Reserve Board removed an exemption it had given to six banks at the start of the crisis in 2007 aimed at boosting liquidity in financing markets for securities backed by mortgage- and asset-backed securities. Wall Street analyst opinions on stocks making headlines in Friday's market Investing pros tell Bloomberg BusinessWeek where they're finding opportunities in the sector now What Wall Street economists and strategists had to say about key developments on Mar. 17 A recovering economy means U.S. companies can afford to increase their payouts to shareholders—and that's boosting the appeal of dividend-paying stocks The Federal Reserve is holding out for additional evidence of a self-sustaining recovery before it takes more aggressive action Sen. Judd Gregg, (R-N.H.) talks with Bloomberg's Susan Li about the U.S. government's efforts to overhaul the financial industry |
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