by Craig Issod, [email protected]
Some time ago, I posted questioning the value of certain mass media for hearth advertising. My logic went something like this: I don't care if the Philadelphia Inquirer (Newpaper) goes to one million readers....all I care about is how many of my prospective customers see my ad (and respond).
Some of you may remember those joking statistics about how many people in the US are actually working for a living - the joke subtracts all those who are on welfare, public assistance, work for the government, army etc...and comes to the conclusion that only you and I are left !
There is some truth to this. What is the value of a lead for your business? A great deal of thought is required to calculate this. Let's take some examples:
1. If you placed a $300. ad in your local newspaper and 10 people called on the phone ($30.00 a lead)..would you be pleased ? How about if 20 people called ($15.00 a lead) - It's my guess that most retailers on this list would be more than pleased if they got this response - I sure don't from most of my advertising.
2. If you placed the $300. ad and one person called, came in and purchased a installed fireplace ($5,000)...how would that suit you. I'd be very pleased myself...What if they bought a $2,000 job - That means you spent a whopping 15% of the sale on the advertising... I'd still be pleased as punch (see below)
The truth is that there is much more to it that the immediate sales and leads. I'd try to satisfy the one customer who bought, hoping to see their friends and neighbors later on - these customers would be sent to me at no charge - $0.00 cost per lead - Good customer service is beyond the scope of this little diatribe, but you can get some idea of its value by the above.
My Yellow Pages guy came in the other day..and kept swearing up and down that "The Book" (he says the words with reverence) is the best value in advertising, and if you are not in there for mega-bucks - well, you're sunk ! Imagine the look on his face when I told him I saw MANY more leads from my low-cost Web Presence than I get from my $1400./Month in the Yellow Book. He went on to explain that this was probably because I advertise my web site address in the Yellow Page ads (ha ha)..
An article in the paper today talks about the new TV news channels, specifically MSNBC and the FOX news channels. Recent Nielsen ratings show that, although over 50 million people have access to these channels, the TOTAL number of people that see them per day would fit in a baseball stadium (about 50,000) with room to spare. This is over a 24 hour period, so imagine how few might be watching it at one time ! One advertising exec said "At present rates, it would be cheaper to call each and every viewer and ask them to try your product".
Yet, you still find advertisers on these channels !
The moral of this story is that Hearth Retailers and Manufacturers should think carefully about placement of their marketing dollars. Traditional media may not be the right place..each and every expenditure should be analyzed as to effectiveness and return...don't just do it cause you ,"think" it's right.
Many media have pumped their prices up beyond what the value is. Sure, co-op helps, but if an ad is not pulling the 50% discount (from co-op) does no good either.
It is my opinion that "target marketing" such as Home Shows, Direct Mailings (New Homeowners, etc), Web Presence and follow-up of existing leads will benefit most Hearth industry member more than "throwing money at the wall and hoping some sticks".
The value of a "lead" to a hearth retailer or manufacturer probably runs from a low of $1.00 (very general, unqualified) to as high as $200.00, a very broad spectrum. Remember, the "circle of influence" of this one lead (after you make the sale) comes to you for free. I've always used a figure of 10 "free" leads for every paid one (over the years)..so the $200.00 lead doesn't look too bad when it comes down to $20.00 !
I'd love to hear from others as to their advertising and marketing experiences.