How do you reach your target market as profitability as possible? The number of choices can be daunting: direct mail, card decks, magazines, newspapers, package inserts, catalog inserts, free standing inserts, radio, TV, pay-per-click search engines, online affiliate programs and sponsorships, banner ads and more.
Here’s how to sort out the possibilities.
Define Your Market
Who’s your typical customer? Male or female? Average age? Income level? What part of the country do they live in? In an urban, suburban or rural area? Do they grow vegetables or ornamentals? Do they enjoy outdoor living, but aren’t necessarily gardeners?
Defining who you’re looking for is the first step in finding them. Ask the advertising reps you talk to for information on their audience, and compare it to your ideal customer.
Watch the Competition
Review media with a sharp eye to two criteria: 1) Do other advertisers who track their results use it regularly? and 2) How similar are those advertisers to your company?
If you see a key code on an ad, that company is tracking results. If they are, and they run repeatedly in an advertising medium, you can bet it’s working for them. The closer their business is to yours, the more likely that medium will work for you, too.
Review Your Objectives
Narrow your media categories based on what you’re trying to accomplish. Want to generate leads for information? Then focus on media with a very low cost to reach each prospect.
Does your product have a very short season? Watch your one-time costs or it could take years to recoup those expenses.
Want to support your retail sales? Garden magazines offer high visibility because readers save and refer to them for years.
Determine Breakeven
First, determine your profit margin by subtracting your average per order costs – including product, credit card processing, fulfillment, shipping – from your average income. Then divide your media cost by the resulting profit margin to figure out how many sales you need to break even.
If you don’t know if the breakeven point for a particular medium is realistic, call an expert or consult a direct marketing text.
Set a Budget
A good rule of thumb is that your advertising budget should be roughly 10% of your gross sales.
An alternative formula: If you want to sell a certain amount of product, and you know what your media cost per sale usually runs, multiply those two figures to arrive at your budget.
Allocate Your Funds
After your initial tests, put most of your budget behind what’s worked in the past: proven media, proven ads, proven offers. Don’t stop what’s working for you just because you’re tired of it or something else looks like a better deal.
Also be sure that no individual media buy is an overwhelming percentage of your budget.
Keep testing
Proven ads eventually saturate the market. Markets change. Emerging trends influence your buyers. It’s important to keep testing to identify new opportunities. To maximize your profits, devote 20% to 40% of your budget to new media, different offers and fresh copy and design.
