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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


What is your conversion rate of prospects to sold clients?

(Number of Sold Clients) / (Number of Prospects)  = Conversion Rate

2 / 12 = .17 (or 17%)

Your conversion rate of prospects to sold clients is 17%


What is your cost per sold client?

(Cost of Ad) / (Number of Sold Clients) = Cost Per Sale

$135.00 / 2 = $67.50

Your marketing cost per sale is $67.50.


Now let's say you place a display ad in a large local corporate newsletter and it costs you $450.  You get 27 calls which turn into 4 sales. 

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


What is your conversion rate of prospects to sold clients?

(Number of Sold Clients) / (Number of Prospects)  = Conversion Rate

4 / 27 = .15 (or 15%)

Your conversion rate of prospects to sold clients is 15%


What is your cost per sold client?

(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/


Todays News by officejax free advertising and ad exchange solutionsMORE RESOURCES updated Sat. August / 19 / 2017

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Nieman Journalism Lab at Harvard

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Forbes

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BrandLab study reveals lack of diversity in marketing and advertising; how is your company doing? - Minneapolis / St. Paul Business Journal

Minneapolis / St. Paul Business Journal

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