Want to Lower Cost of Advertising?
When you pay your monthly advertising bills, do you resent writing those checks? Do you ever feel that advertising is way too expensive? Or do you feel that certain advertising is too expensive? How do you know that? How do you know for certain that some advertising is not bringing in what it should?
The real question should be:
What are you doing to make sure you are getting the sales you need in order to make your advertising worth it for you?
Here is a Real Life Example of a company that spends a lot of money on advertising each year, and more than $100,000 just for advertising on a certain radio station.
They were in a predicament because the overall cost of advertising on one of the radio stations was a little over 38%. Simple math means 38 cents of every dollar in sales that came from the station’s advertising were being given back to the station. Problem is, the company had budgeted ten cents on the dollar, or 10%.
They needed to do something!
This is what they did to bring their cost of advertising from 38% to 7%:
Step 1. They laid everything out on the table to see who was good at selling the radio leads.
The FIRST NUMBER they considered was how much revenue each sales rep was bringing in from the radio station leads. They did not even consider the closing ratio so much at this point, but wanted to focus on the total dollars.
They focused on gross revenues in sales instead of closing ratios.
Step 2. They spoke with their sales team and told them they were going to operate the game in a new way.
Now that they could see that some of their reps were better at selling the radio leads, they needed to do something drastic. No longer were the sales reps to expect the leads to be delivered automatically, but rather the leads were going to be earned based on results, and specifically based on results of each individual lead source. Anyone who wanted to get radio leads would need to bring and their sales from the radio station to a certain level. Once that level was reached, they would get more radio leads. The same held true for other lead sources. No more Round Robin lead distribution!
Leads were no longer distributed; they were earned!
Step 3. They immediately began to see positive results.
Sure, some of the people balked and sputtered and made a lot of noise, especially the ones who were not bringing in enough sales from the radio. However, there was one sales rep who was quiet because he knew he was holding a golden egg. He was really good at selling those leads, and he knew that a door had been opened to him based on his prior SUCCESS, and all he had to do was continue doing what he was doing. Now he had a huge chance to use that opportunity to his advantage. Within a month, the numbers started to turn, and they were heading in the right direction.
Giving sales people permission to sell where are good is not only a benefit to them, but also to their customers and the company!
Step 4. Sales Increased. Cost is down. Mission accomplished! They are on the right path.
Not only did their overall cost of making a sale decrease from 38.45% to 7.17%, but their overall closing ratio increased from 15% to 39%. Bottom line, they are hundreds of thousands of dollars ahead of where they were at this time last year in regards to radio sales.
When you track, you have data and numbers necessary for dictating your important business decisions!
That can make all the difference…
Do you think the company resents writing those large monthly checks to the radio station nowadays? Nope. They happily hand them over and wait for the next week’s calls.
“Winners Know Their Numbers.”
Profit Finder Pro Software
P.S. Click here to see an example of a salesperson performance report.
P.P.S. You will get better results if leads are earned, not distributed. How do you assign leads?
P.P.P.S. This same strategy can work in any business.