Small business marketing can be a great big hole that sucks your money into the vortex. How much do you need? What do you need to do? How much time do you need to spend blogging, twittering and networking? What if you think you don’t have a creative bone in your body?
Sometimes marketing for small business can make you feel like you’re in an endless rerun of Mad Men.
Many marketing people will tell you that you can’t really measure return on investment (ROI) with marketing. After all, how do you track the money you paid a PR firm to get you “placed” in Oprah’s magazine? If image is important, how can you track the impression that polished walnut furnishing, fresh flower arrangements brought daily or a perky receptionist make on your clients?
The truth is, that you can’t. But there are places that you can track ROI and you should whenever possible. I see women continue to advertise in magazines for the prestige, or continue to invest in networking groups where they’ve never gotten a sale.
Let’s look at magazines and how you could go about tracking an advertisement.
Say you advertise in two magazines – O and In Style. You can have the person reading the ad respond to you for a free sample. In O, you ask them to respond to Dept. O and for the magazine In Style, you have them respond to Dept. S. You get 1,000 leads from O and 500 leads from In Style. On the surface, it looks like the ad from O is better.
However, let’s say that the ad from O cost you $5,000 and the one from In Style only cost you $1,000. What is your cost per lead?
Cost per lead = Cost of strategy divided by number of leads returned.
So, cost per lead for O is $5 ($5000/1000) and the cost per lead for In Style is $2 ($1000/500). So, even though you received more leads from O, your cost per lead is higher.
Cost per lead isn’t the only determining factor. Cost per sale is actually where the rubber meets the road. I’ll talk about that in Thursday’s blog. (Sign up for the RSS feed to the left if you want to be sure you get every valuable tip that we offer on our blog.)
Now it’s your turn. If you can, determine the cost per lead for every marketing strategy that you had in the past year. Let us know what you find in the comment section below!
