We shall call this case study….”Track and Field.”
James was a very smart business owner who carefully watched every dollar he spent. He cared for his employees but some people said he cared more about how little he had to give up to hire them. He enjoyed being called a penny pincher or frugal and would brag about extreme measures used to cut expenses. Needless to say, he never seemed to be broke (even though he acted as if he was) and spoke very intelligently about finances and banking.
James understood the value of advertising and spent a lot of money on it. Each month during his staff meetings he would paint this picture to his sales staff.
“If I spend $2,000 on advertising and that $2,000 generated 20 prospects through our door, you need to know that it cost me $100 each to get them in. If they didn’t book an appointment right then on the spot, that prospect might as well had just walked over to the cash register, pulled $100 out and lit it on fire in front of you and watched it burn.”
That visual stuck in my head as I was just a young teenager hearing this concept. Wow, what a visual! Years later we moved into a more advanced method of tracking the advertising dollars. We realized that it wasn’t the AMOUNT of money spent but WHERE we spent it. We started keeping track of where the prospects came in from and recorded it on a sheet of paper at the front counter. We asked everyone, “HOW DID YOU HEAR ABOUT US?” Soon we started getting a clear picture. That $300 ad in the newspaper never produced any prospects but that $200 ad in the coupon mailer did. We eventually dropped any of the mediums that didn’t produce and increased the size or frequency of the ads that did produce. The result was astonishing.
March 1997 – ($2,000 budget) Closed 21 sales under the “Throw $2000 at ads and see what happens method”
March 1998 – ($1,600 Budget) Closed 65 sales under the “Track your results and Maximize your ad spend where it counts method”
That was a 300% increase in sales on 20% less money. The only thing we did different each year was the mediums where we advertised. We had tracked where people heard about us and that gave us a completely clear understanding of where we should spend our ad budget. We were empowered with knowledge and could make educated guesses on new mediums to explore and what to stay away from. You could imagine the feeling this gave both of us.
There is still a lot of information that can be unpacked from this case study but for today I wanted to stay on point of TRACKING YOUR RESULTS IN THE FIELD! If you have a “good feeling” of where your results are coming from, then you will let your natural bias and opinions find a way in to influence where you advertise, however if you track your results, you will have black and white numbers, and numbers don’t lie. Tracking these numbers and putting them in a spreadsheet is the only way to truly know how effective your advertising dollars are.
If you want a simple spreadsheet, simply send me an email to help @ garnergroupmarketing.com and I will send it to you.
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