What are the ranges of advertising costs in relation to gross that you are comfortable with? My sister has owned a toy store for almost 20 years and she said she frequently hears 5-8% in the toy store industry but she is content to spend in the 3-4% range.
My advertising and marketing is starting at ground zero. The previous owner of the company had no expenditures for advertising and marketing. I made business cards for him and myself (I worked for him for 2 years) but I was the only one who distributed them.
I am leaning strongly towards sponsoring athletics/recreational and wellness programs. I am not sure what the rate of return will be but I do know that it will make me feel good to give back to the community vs. just throwing money at the conventional radio and newspaper media.
Very interesting. I probably need to put more research into more direct connections with homeowners and business owners versus planting seeds that might create competition
Iām a strange bird, I knowā¦
Iāve never been a āPercentage of Sales Methodā guy.
I just donāt.
The problem I have with it is what if you have a bad year
(which I realize nobody on this forum ever will,
itās always 2000% growth every single year for the rest of their lives.)
BUT.
Iām more along the lines of a Task method.
Thatās not to say I couldnāt tell you what my % of Gross IS.
itās just not my main metric
(I never include āCurrentsā, they are their own entity and have a separate Retention budget)
Log story short, if Iām down, and I see PWash is the main lagger, I dump the Task money to improve that service.
And more important, IF IāM DOWNā¦ I donāt decrease my spending to correlate with a āPercentage of Sales.ā
[Iām typing fast, with a cigarette in my hand, so I hope Iām making sense]
I am conceptualizing your use of the Task method as a mobile reserve that is used to prevent breaches. I suppose that for the new guys like me we would need somewhat of a baseline established to identify lagging areas. Or perhaps we could use our projected revenues for fuzzy baselines in the early stages.
I take into consideration ānew guys like you/me/usā
Probably more so than anyone else on the forumā¦ I am that āyou never know guy.ā
Thatās partially why I donāt straight up use a Percent of Sales approach.
What is your affordability? (you donāt have to answer, just know it) That is your budget right now.
It may feel a little like Iām saying āuse it or lose itā and maybe I am.
But at least you have a solid number of what you are comfortable with.
This year we have budgeted 1.625316 % of projected sales ( or 2 % ) for those guys that are loose with numbers.
Small budget but effective. Two Mailings a year to Res. only. Two different YP ads. A small 16x16 billboard on a local US highway in our town. And then " non-budget " incidental Items such as a new polo ( w Logo ) goes here.
I DO NOT EVER buy anything that is not in the budget. No football - basketball programs. No stupid benches on the busy corner. No shopping carts. No throw away money stuff. Slow and steady and conservative is what works. And NO NO NO NEVER !! Val-Pak. Got a lighter ? Got a dollar ? that is much more quicker and efficient way to burn money. Just do that and be done with it.
iāve been in a valpak type mailer here for 3 mailings and itās been awesome! iāve gotten probably 50 customers and maybe $7,000-10,000 from my $750 investment (plus 300 incredit, some of which the salesman gave to others which spreads my name even further)
Iām shooting for 15% this year. Doubled my yelp spend, ad words spend and bing spend so far. I am going to ramp up direct mail from quarterly to monthly. That should do it. I may spend a little on home advisor as well and give it a try.
