All the actions that you take to attract customers are definitely worth evaluating. Marketing techniques should work, attracting the attention of potential customers. The return on these efforts should be maximized.
1000 flyers and 10 calls can in one situation help to achieve the desired goal, and in another they will become an unacceptable result. This is especially a welcome goal for enterprises that offer expensive services.
First you need to understand the technologies and methods for evaluating the effectiveness of marketing.
What indicators should be guided and how is this done? How to measure them correctly? You can imagine several ways:
- The total cost of running an advertising company.
- The total number of responses.
- The percentage of response hits from the total number of messages.
- The price of one appeal.
- The number of responses that resulted in new customers.
- Percentage of calls in new customers.
- Price for each customer attracted
- Value-to-value ratio of a new customer.
- ROI - return in the form of a classic indicator in the case of sales (margin per ruble of marketing costs).
Some details should be considered. What is the total cost of an advertising company? This is all the money that you could invest in a campaign to attract new potential customers.
The number of calls is how many people have come to you for help. The percentage of responses from the total number of all messages. If we consider the example of 1000 flyers and ten incoming calls. This means that you received approximately 1% of hits.
What is the price of one response? If each flyer cost you 5 rubles, then your total cost was approximately 5,000 rubles. The price of each individual appeal will be 500 rubles.
How to calculate the number of responses based on which new customers were purchased? For example, if out of these ten calls, five people decide to purchase something, in this case the conversion percentage will be about 50%. Mathematical calculations are quite simple, but in this case, you can always pre-calculate for yourself, so as not to remain in the cons. You can also compare various channels with each other.
The price of attracting one potential customer. The cost of each person will not be 500 rubles, as mentioned above, but 1000 rubles. We carry out simple calculations, multiplying this figure by two, and we get the cost of one client, which will be equal to 1000 rubles.
If the value of each potential customer is ten times greater, then this option of the advertising campaign will be the most successful for you. You can safely use this channel for marketing purposes. Each ruble that has been invested in marketing will bring you more than 10 rubles of net profit.
Is this a lot or is it still very small? Over time, you yourself will be able to evaluate this fact, focusing solely on the profitability of your business. Such indicators should be measured by the results of each individual advertising campaign. Today we will try to present the situation with the following examples.
Example No. 1. Evaluation of an advertising company.
The businessman made an addressless mailing list inviting him to sign up for his fitness club, which works for adults and children.
In total, more than 5,000 letters were sent to the city's mailboxes.
- The cost of printing costs exceeded the amount of 16,300 rubles.
- 10 people called.
- The total percentage of responses based on the figure was 0.2% (10/5000)
- The price of one response will be equal to 1630 rubles, for this you need to divide the total amount of 16300 by 10.
- The number of requests that led to the acquisition of new customers is 5.
- The conversion percentage of new customers was 50% (5:10).
- The cost of attracting for each new client increased to 3260 rubles.
The businessman was unsatisfied with the results and continued the advertising campaign. Flyers were launched into the people.
Very important nuance
The question may arise: is it worth considering the costs of an advertising company that are associated with managers and communication? In any case, you should not hope that the client will get you for free.
You will have to pay for each new customer, even if your point is located in a huge shopping center, and potential buyers independently come to you for goods. The cost of each client can be calculated.
You regularly pay rent, pay salaries to employees, pay utilities monthly, etc. Most of these costs go to the fact that customers come without any additional marketing efforts.
Now we will consider an example with an assessment of advertising companies.
If your store is regularly visited by more than 100 people every day, then after the launch of an advertising company, this figure will double. This is the whole essence of marketing effectiveness, because you need to take into account exclusively new customers, and constantly compare what is cheaper. Perhaps the SMS mailing will be a great way to attract new potential people wishing to purchase your product, or maybe flyers will become effective. Advertising on the radio can play its role in the same way as billboards in crowded places.
Example No. 2. Evaluation of an advertising campaign.
If the mailing list did not meet all your expectations, then it is worth trying to use flyers to attract new customers.
- 1000 leaflets were given to the press, which cost 1,100 rubles. The work of promoters will cost 1280 rubles, which for several days will be distributed to all passers-by flyers. In total, 2,380 rubles are obtained - costs.
- Received 14 calls.
- The overall response rate was 1.4%
- The cost of each response is estimated at 170 rubles (2380: 14).
- The number of responses based on the results of which new customers were acquired is 5.
- The percentage conversion is 36% (5/14).
- The profit from each new client is 476 rubles (2830/5).
Alexei was quite pleased with the results of the advertising campaign. He decided to use this option as soon as possible to attract new potential customers.
If we compare the results with the mailing list, then the flyers were much more effective. In addition, they were much cheaper, and as the main source of customer value, this data suited entrepreneur Alexei.
He uses this option now. We finish leaflets and thus create a stronger offer in order to increase the percentage of responses.
Example 3. Evaluation of an advertising company
A chain of stores decided to make an SMS distribution based on a subscriber base.
- The cost of each message cost an average of 1 ruble.
- About 25% of those who received this message came to the store, and about 30% of customers made an average purchase of 3,000 rubles, margins of at least 500 rubles.
- The percentage conversion of messages to purchase was 6.25%, i.e. 25% x 25%.
- Considering that out of a hundred subscribers, six made a purchase and brought in the amount of 3,000 rubles, then each ruble spent on an advertising company brought 30 margins.
This version of the advertising company is very effective, and similar results are very typical for SMS mailing, if it is done correctly.
A well-written proposal does not mean sending advertising messages every week. You need to send messages at least once every two weeks, then you can safely count on such results.
Do not discount the SMS distribution, as well as mobile marketing. It must be used if the target audience treats your actions as loyally as possible.
Example No. 4. Campaign Rating
The advertising company was committed to Yandex. Direct ”, based on the key phrase“ bathroom repair ”, with a series of announcements such as:“ Do you urgently need a repair in the bathroom? ” 5% discount only until September 15th! Click right now! ”
- Total costs amounted to more than 3982 rubles.
- The result was 230 169 impressions of your ad.
- Transitions to the site - 1199.
- Over 100 calls from the site.
- More than 25 orders with a margin of about 40,000 rubles.
- Response rate was 0.52%
- The price of one appeal is 3.32 rubles
- The cost for each new client is 159 rubles (3982/25).
- ROI amounted to 1258 rubles of additional margin per ruble of marketing costs.
Such an advertising company with high competitiveness and minimal costs brought quite good results. This system works, and the number of new customers is only increasing.