Tip #3 How do I know if my advertising works?

Hmmm, we've never heard that question before. Humor aside, it probably is the number one question any business owner asks (aside from how can I reduce payroll costs). So here's the answer.

Well, actually, if we could answer that question with certainty, we wouldn't be writing this blog, but rather collecting royalties from our absolute corner on every market everywhere. See, nobody can predict with certainty how well any particular advertisement will work. There are just too many variables, and each of them is constantly changing.

Of course, you may respond, "Well even if you can't predict what will work, once I bought an ad, it should be easy to track". And if you said that, you are either a true marketing expert (like Don Smith) , or you haven't bought too many ads.

See, the problem is to fold. First you have to track. Second you have to get accurate results from your tracking. If you can do both you'll start to be able to evaluate your advertising. We paid a consultant to talk with our advertisers, and you know what she found out? The more carefully our customer tracked all their advertising, the more likely they were to renew, and be happy with our PI and Process Directories!

Let's try tracking ad responses first. First, you need to track your raw responses. You need to ask every caller where they found you. Say you put an ad in the NAPPS docket sheet magazine, how may people contacted you as a result? Let's say you carefully ask each phone caller for the next month, and 11 of them say "the Docket Sheet", now you know for X dollars, you got 11 calls in the first month.

So it's X divided by 11! Well, no. What about the 32 web site visitors you had in that month. Did any of them get your web address out of the Docket Sheet? And the 5 e-mails, were they from the web site, or from your e-mail address in your ad, or worse did someone go to your web site, because of the ad, and then e-mail you from there, or call you from the number on the web site, rather than copying it from the ad? And, how many people lost your ad, but remembered to type Pennsylvania Professional Process Service into a Google search?

How many leads did you get from that Docket Sheet ad? Actually you don't know for sure, so it too is a variable (let us call it Y). So your cost per contact (lead) is X divided by Y! Wow... that helps. "Hey Bob, we only spent X/Y dollars for this call"!

And, even if you ask everyone in the world where they found you, they won't report it accurately. They lie. Many people who find your web site, by any means, will say they found you in Yahoo or Google, even if they made seven or eight clicks between the search results and your web site.

By way of example, we have a Court Reporter who advertises with Rominger Legal, and has no web site. She said if she did, she wouldn't know what to think about where her business came from, because most people say they found her in Google. But we are her only online presence!

Most large advertisers expect more than 20% of all consumers using traditional medias to report incorrect data about where they found out about a product or business. The ease of movement on the web complicates the matter even more. The fact that many people blur their web experience, often not realizing when they have changed sites (or more importantly, not caring), means that most people usually identify their portal of entry as opposed to the actual page or site where they found a business.

So what do you do? Well you keep tracking, and calculating. Don't be daunted, but do be persistent.

See, if X is your ad cost, you'll always have that. Just look at what you pay. And Y, as a function of contacts isn't impossible either. First, it cannot be more than the actual number of contacts you get. So if you have 32 contacts in a month, from all sources, Y is less than or equal to that 32. Tracking hard will increase your certainty of Y's various sources.

If we advertise on Google, Rominger Legal and the Yellow pages, we might be able to sort out which works best, or, more typically, we might know that about 65% of new contacts are from all the advertisements, and 35% are client referrals. So X = the cost of all three, and Y equals 65% of our new contacts.

If X= $200.00 per month and Y = 20 contacts per month, we have 200 / 20 * 65%
or $200 / 13. That's about $15.00 per lead.

Wow, now were done. - No? hmmm? Remember, you just figured out what a lead or call costs.

But what does a sale cost? If we're hired by 1 out of every 4 leads, our cost per sale is $60.00. If you're a process server, unless its Hague work, you'ld better retool. If your a $55.00 dollar an hour gumshoe, and your average ticket is $1365.00, you might want to spend more!

Of course, why are you only converting one out of every four? Is it that the leads are soft? Or, are you overworked, understaffed and voice mail dependent, and usually don't call people back in less than twenty minutes, let alone three hours? (maybe that should be addressed in Tip #4)

So, to summarize. Ask, ask, ask. Track, track, track. If you want to know what works you and your staff must ask everyone where they found you. We call people all the time, and amazingly, very few ask where we found them! What a lost opportunity.