Too often, businesses, even big ones, are unaware of how customers find them; lots of intuition, without a shred of actual data.
This, in my opinion, is why the Yellow Pages still exists in printed form and local radio stations are still able to pay rent; people continue to believe they are an effective method of advertising without having actual data to demonstrate this.
Most small businesses lack budgets to advertise with and so they rely on ‘ol tried and true known quantities. “The last time we advertised on the radio, we sold 16 sandwiches” or another might say, “we got lots of phone calls on Monday after we ran the newspaper ad on Sunday.”
Maybe…. or maybe not.
True objectivity, would have them count the number of coupons from their special ad or use a call-tracking software, dedicated only to that ad campaign.
The math thereafter, is aimed at defining customer acquisition cost and perhaps an isolated look at net revenue per campaign.
Let’s say your dental office spent $300 per month for 6 months on a radio campaign that offered a free consultation and teeth cleaning with the mention of “such-and-such radio ad” – So, $1800 spent on the dental radio ads.
At the end of the six months, you averaged 1.5 new patients per month – so, in total, 9 new dental patients who mentioned your ad.
Each cleaning and consultation you pay your hygienist about $50 per hour and you take some of your own time, a receptionist to coordinate things, some overhead in there and voila – $65 in cost for each new patient x 9 = $585.
Add to this the dental radio ad costs and $2385 in costs…
Now, the hope in these circumstances is that your newly acquired patients turn into longtime recurring revenue opportunities as a result of rescheduling. The remaining math would allow you to evaluate the annual or lifetime value of a customer.
In the dental industry it’s quite good, so there while you’ll still have those cleaning and overhead costs, you’re in a position to re-market through email and phone channels, rather than have to re-acquire every single month.
Flying blind, however, is a bad strategy. We’ve learned tons from having the ability to track data online, on our websites and across various digital ad channels.
We also have a really great idea of how people search, the frequency and volume of those inquiries and we can get really specific about their journey to conversion.
Another advantage of digital marketing is that we can catch people at what we’d call their “moment of intent.”
When your dental office advertises on the radio, you have great intentions; after all, (almost) everyone has teeth.
What we don’t know, however, is of those listening, how many are actively searching for a new dentist? How many perhaps aren’t looking, but could be persuaded by your offer; is what you’re offering ‘enough?’
Finally, maybe they aren’t in the market now, but when they are, will they remember you or are there avenues they might pursue that uncovers a competitor?
So, overall, it’s not that your small business shouldn’t advertise on the radio or any other antiquated medium; it’s that when doing so, you should go to equally great efforts to measure the effectiveness of your small business ad campaign.
