Do you just spend money on advertising without knowing whether you have hit the jackpot or not?
Far too many companies have no idea or way of reconciling their ad spend back to actual sales, so they cannot calculate their “return on investment”. Agencies will supply reports on spend, reach and clicks, but how do you know if any of that turned into sales?
There are two fallacies out there that need to be broken right now. The first one is, in order to get more customers you need to target as big an audience as possible. The second one is, in order to get more customers you need to spend more on advertising.
Let’s break those each down in more detail. Firstly, to get more customers you need to target the correct customers in the first place, not a broader audience. Secondly, if you target the correct customers in the first place, you will not waste spend on a broader audience.
What does this mean? If you figure out who your ideal customer is, you can position your messaging to that audience specifically. That means only those people will be clicking on your ads, therefore your spend will be lower and the probability of of you converting one of those leads into a paying customer is far higher. Then, if you systems in place to track that, and you know the typical “life time value” of you customer, you will be in a position to calculate your “return on ad spend” and ultimately you “return on investment”.
Do not be fooled by agencies that want you to spend more if you have an agreement that they earn a percentage of your ad spend. Stop gambling your money away, contact us if you have any doubts about that.