Say you had 400 leads and 80 sales — a closing rate of 20%. If everything stays the same, you’ll need 120 jobs to reach $1.8 million in sales ($1.8 million Ă· $15,000). Divide 120 by your closing rate of 20%. The figure you come up with — 600 — is the total leads you’ll need. That’s 50% more than the 400 you had to generate last year’s revenue.
Say you spent 6% of sales ($72,000) on marketing, or $180 per lead. Using similar lead sources, you’d need to spend $36,000 more this year to meet new sales goals.
For better results, pinpoint your most effective lead sources and make incremental increases in these areas. Conversely, consider eliminating poor sources. For 600 leads, you need 11.5 each week. From that, establish close rate targets and sales projections.
Adjust for seasonal variations, and know what you need to stay on track, week by week. If average project size or close rates change, the number of leads you need will also change. Recalculate everything.
It depends on the market.
“We’ve tried media in the past,” says Brian Leader of Ohio Energy in Columbus. “We’ve never been able to do it cost-effectively.”
So, for some, it doesn’t work. Others swear that TV can be highly effective, if it has a clear call to action and enough frequency and reach. But frequency and reach make it a costly endeavor.
Author Herb Gross of Charlotte, N.C., says few can afford mass media in costly markets like New York, Los Angeles, Boston, Chicago, Philadelphia, San Francisco, Detroit, and Atlanta. An alternative is to identify key ZIP codes and market using direct mail, cable TV, and local publications.
Ron Sherman of Ron Sherman Advertising and Teleproductions, of Little Rock, Ark., says the top 15 markets require at least $200,000 a year in network TV advertising for TV to be a solid lead source. Smaller budgets don’t produce results. You need to reach target viewers three to five times each month.
Sherman says in smaller media markets, tighter budgets can produce leads. One of his Kansas City clients spends $150,000, with TV as the only lead source. He grosses $2 million in sunroom sales.
Can you afford a trial run? Sherman recommends 90 days — at which point he tweaks the campaign, reviewing how it’s produced and if the programs carrying it are effective. He also asks: Can the message be made more personal? In a large market, $200,000 funds a 90- to 120-day test. That can be accomplished for $35,000 to $50,000 in small- to mid-sized markets.
Sherman says he aims to make phones ring immediately. By re-evaluating after 90 days, even slight changes boost results. The goal is a clear, concise, and frequent selling message.
Sherman produces more than 400 TV ads each month. The most popular are “personalized” spots and 60-second sales spots with three “hooks.” The personalized ads, for example, can run during noon news hours, and create urgency by building to a climax with the hour’s final ad, which urges viewers to take advantage of a last-chance offer.
Gross says it can take nine months for a TV campaign to take hold. But each year you advertise, you will get better results.