Advertisement ratio

[Clean County PW]

This past year I averaged $10 made for every $1 to advertise making my ratio 10-1. This brings a couple of questions to mind.

1-What would most of you say was your average ratio this past year in this department?

2-What would you consider to be a good and reasonable ratio?
I would say 15-1

3-If you double or even triple your advertisement how much more revenues can your company make?
To this, one may have to hirer more workers and that being said I guestimate that if the advertisment was doubled then possibly 75% more revenue could be brought in. And if the advertisment was tripled then around 125% more revenue.

I'm just bangin around idea's in my head for advertising for this coming year.

 

[Michael T]

John, I follow your line of thinking. But, there is a point of no return. It depends on several factors. 1. Your target market. 2. The media you use. 3. $$$ . Throwing money at a source doesnt always mean a return. When I do residential , I use yard sighs, one time cost continual return. Also try flyers in area or door hangers. My experience (15 yrs) is deminished return from yellow page listing. The cost kept climbing up until last year . It cost me $2400.00 for a display add (2"). The return had peaked out. I switched to a 1/2" display add. $800.00. All I wanted was a presence in the yellow pages. I got the same results for 1/3 the money. I consider a yellow page add a LISTING not advertizing. Some will disagree. I argued with the sales man , he wanted to "give " me more add size and extra listings. Reality was he didnt want me to spend less money. After negotiating I told him my limit was 800.00, finally he agreed with a sigh. I figure its my money and Im going to get the most out of it. Personally my market is 90% commercial. 90% of my new commercial business comes from referals. 90% of my new residential business comes from the yellow pages or flyers and yard signs. But my target has been commercial for the last 7 years.
To sum everything up . Get the most bang for your buck. And be consistant.
Hope this helps .
Michael T / Centex

 

[Dave Olson]

Hello Clean Country,

Our advertising expense over the past 5 years was 3.3% of revenue.

Over 5 years ago I tried what you are suggesting, increase dollars spent will generate X amount of increased revenue. It didn't work! Keep in mind I do mostly commercial and industrial work and live in the middle of a corn field!

Dave Olson

 

[Clean County PW]

I do mostly residential and I probably nail down around 30% of my estimates. My thinking is that if I can advertise in more area's I could get more potential customers which in turn means more $$$$$.

The obvious downfall to this is #1 will I have the time to do these extra estimates. #2 will I be able to hire good employees to handle the work load.

These are what I call good problems if there is such a thing. Kind of Like the New England Patriots with there Quarterback problem. Which by most teams would be considered to be a good problem. That problem being how many teams have a choice of picking a starter among 2 good quarterbacks.

 

[Doc]

Dollars spent in advertising can be nebulous because the impact is often slow. It is said a potential client must see an advertisement a minimum of 7 times before acting.

I think there is other advertising avenues not explored within these threads that could be a potential for further income if utilized. The money spent and returns are important factors and should be looked at when deciding on advertising but the real question is commitment and longevity.

How many “In your face” types of advertising do we use? Are we willing to wait for potential customers to see our sign or inadvertently flip through the yellow pages to see our $3000.00 per year ad?

The though that drives me is, I don’t want the customer to consider me at the point of service needed. I want the client to want my services before it is needed. By conditioning potential clients to your product or service (before the fact) eliminates the competition because you are always in the back of their mind. Who is the first person called? The first person remembered.