As a business owner, you are always faced with decision making challenges. And one of them is Advertising.
Today, I’ll give you an example and show you a simple and effective way to track your advertising return on investment, which will help you make better decisions in terms of how much money you should invest into advertising and where is the most profitable advertising source for your business.
If you already advertise your business online or are considering to, you have many different options to choose from, including: Google, Facebook, Instagram, LinkedIn, Yellow Pages and so on.
And then of course there are the traditional methods to consider, such as your local newspaper, radio or tv.
So the question is, how do you decide which option is the right one for you? Which method is actually bringing you more clients?
Just to note, I’m not doing this video to promote any particular advertising platform.
The figures I will give you in the following example, are just so you can understand the importance of tracking your results.
So, let’s consider the following scenario:
You have a $1,000 monthly budget to spend on your business ads.
Let’s say you’ve decided to spend $500 on Google and $500 on a Local Newspaper
At the end of the month you check your data and see:
That you have received 20 new business leads from Google.
And 10 from your local newspaper.
So, in total we have 30 new enquiries for $1,000 spend.
So, what does this really mean?
It means, that if you had spent all of your $1,000 budget on Google alone, you would have received 40 new business enquiries instead of 30 like you did.
That’s almost 50% more enquiries for the same amount of money spent, and a much better result that you would’ve achieved by simply allocating your budget differently.
And just for the sake of this exercise, imagine if you’ve actually spent all of your $1000 Budget on the local newspaper.
You would have then only received the 20 Enquiries instead of the 40 from Google.
Which is half the enquiries for the same budget.
The point is, tracking your advertising campaign is really a necessity these days.
Different sales people will tell you different stories about where you should advertise, but you have to do your due diligence.
So how do we do it?
The easiest way to start tracking your results, is to make it a requirement in your company to ask each new client who calls or emails you with a new business enquiry, a simple question “How did you find us?”
Record this information either in a simple excel spread sheet, or ideally, in a CRM software that you use to record your new business leads.
Your spreadsheet should contain 3 columns:
- Advertising Source Name
- Amount Spent
- Number of New Business Enquiries received
You could also include (and this is what I really like to do):
- Number of Jobs Won and
- Total Dollar Value of all jobs that you have gained through this advertising source.
The columns 4 and 5 are good to consider, because the quality of new business leads you receive might also depend on the advertising source you use.
Look at this data at the end of each month and you will make much better advertising decisions for the following month, I guarantee you that!
I will also be posting some videos regarding lead tracking through the software products like Google Analytics for example. So stay tuned and consider subscribing to our YouTube Chanel so you won’t miss anything.
You can also download an example spread sheet for your leads tracking from our website.