Advertising is an essential expense to any business however an expensive one. Keep in mind these helpful tips to ensure you are getting the most out of your advertising:
1) Monitor your ads.
It is important to keep track of what ad is working for you. This is as simple as giving each type of ad a specific promo code then customers must provide this code to receive your service.
2) Highlight Your Competitive Advantage.
One of the keys to all advertising is to accentuate the pros of your company — those factors that give you your competitive edge. Too many ads are clever but fail to sell the specific benefits of the featured product or service. Unless you highlight these benefits, your ad delivers no value to potential customers.
3) You Have to Spend Money to Make Money.
There are ways to save money, but advertising is typically not the place to cut corners. Doing so will affect sales, and that affects the bottom line. Successful advertising may cost some money, but that is because it works.
How do you know if your advertising is costing you too much?
The process is simple. You need to determine the rate of return on your investment on advertising. Example:
First, you’ve got to know how much profit you make on each sale. For instance, if you buy whatever it is you sell for $50 and sell it for $100, your gross profit is $50.
Second, figure out what your breakeven is. Do this by taking cost of the advertisement and divide it by the amount of gross profit per sale. If the ad costs you $100 and your gross profit is $50, that means you have to make 2 sales to make back your investment.
Thirdly, if your ad is generating 2 or more sales in the advertising period then it is profitable. This is why monitoring your ads is crucial for effective advertising.
Depending on your industry determines how many potential clients it would take to make the one sale. On average it is 1 out of 10. This means that 10 people would have to read your ad to get one sale.
For more information give us a call at Ashcroft & Associates 250 334-3797.
