If you are like most businesses, you probably don’t even have a marketing budget established. You may wait for a student to approach you for yearbook ad space and toss them $25. Then you might even pay whatever the yellow pages tells you is necessary (don’t get me started on this racket!) and call it a year, then wonder why your phone isn’t ringing.
Let me bottom-line it for ya…MARKETING IS A NUMBERS GAME. The more numbers you put in, the more you get out. Aside from investing your advertising dollars in the best media possible, and making your ads stand out among the competition, it comes down to how much you spend and how you spend it.
So how should you come up with this figure?
First, let’s look at what we know:
1. how much were your sales last year?
2. how much was your cost of occupancy last year?
3. what is the average markup on your products? (your cost/sell price)
If you HAVE given Ad budgets any thought, you probably never heard of thinking about markups and cost of occupancy. Most “do-it-yourself” marketing plans just throw a figure at you like %5 -6% of sales and you’re done. But if you do not consider these numbers, you could be greatly malnourishing your company.
LOCATION LOCATION LOCATION:
The more you pay for a location, the more visible it is. This visibility can save you on advertising. (you just need to concentrate on making your facility more attractive to the traffic going by you.
Why should you even consider this? If your cost/per item is low, than you have more income to spend on advertising. Not to mention the bigger the gap, the higher end the product, the more advertising it takes to reach the perfect customer.
SO HOW DOES THIS HELP YOU?
Well, I have created a google spreadsheet that will tell you exactly how to figure your own ad budget–just by filling in a few blanks. You can thank me later! 🙂
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*References: “Secret Formulas of the Wizard of Ads” by Roy H. Williams