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Why should you advertise?

Advertising is all around us. The average person is exposed to thousands of advertising messages every day. Think about the number of radio and television commercials you hear and see each day. Take a look at the number of ads in the newspapers and magazines you read, the mailman bring you tons of advertisements each month. Every place you look you’ll find messages saying “buy me” from the clothes you wear to the pen you write with. To top it off national advertisers spend billions of dollars a year on advertising. All of these things are competing for your attention.

So where does your company or business stand in this maze of advertising? How does a small retailer compete for business? Competing for your share of the business you are in takes planning and direction. You must have an effective advertising program, choose from the media available in your area, and most of all compare the costs of each to see which is the most cost effective for your business.

Where should you advertise?

Many advertisers mistakenly advertise on the station they listen to or the station they watch or in the newspaper they read, not taking into account that these may not be the media their customers listen to, watch or read. You need to do some homework. You need the answers to these questions before you advertiser anywhere.

1. What is the age grouping of your customers? a. 18 to 49 b. 25 to 54 c. 54 +
2. Are your customers men or women or both?
3. What is the annual income of your average customer?
4. How far away from your business do your customers travel for your products or services?
5. If you advertised outside your area could you attract more customers?
6. What are your customers’ shopping habits?
7. How do your customers perceive your store or business?
8. Identify your competitors.
9. What is your share of the business compared to that of your competitors?
10. Why do customers choose your competition over your business?
11. Do your competitors advertise?
12. Is their advertising effective? BE OBJECTIVE NOW.

Many of these questions may take some help for an outside consultant because it is hard to objective about your own business or your competition.

Now you are ready to plan your advertising. Hold it just a second. Perhaps we need to define advertising first. Advertising is a paid form of calling attention to a product, service, or business to promote sales. The key words in the definition are “to promote sales.” When you plan your advertising budget make sure that the advertising you do promotes sales. For example, donations of money to the high school year book or to the sheriff’s annual ball generally do not promote sales. They should be included in your donation budget do not put them in your advertising budget.

Now that you have established your goals you need to begin working on a budget. No matter what the size of your budget it is very important to keep in mind that your advertising budget is a fixed expense, just like the rent, the electric bill and your own salary. Advertising is not a luxury to be cut when times are lean. Advertising must be consistent, well conceived and executed correctly. Your business cannot afford to cut advertising when the going gets tough.

How much do I spend on advertising?

A good method for setting your advertising budget is the percent of sales method. With this method you take a percentage of your total gross sales. The general rule is 5% to 7% of your gross yearly sales. Be sure to add in the percentage you feel your business will grow in this coming year. Your business cannot grow this year is you are using last year’s budget. You will also have to increase your budget for a period of time it you are:

1. Changing locations
2. Taking on a new line or changing products
3. Changing your name
4. Or starting a new business.
5. Any major changes you plan for your business

Set aside about 8% to 10% of your advertising budget as a contingence fund. This fund can be used for a special sale that you may not have planned, it can help if the media raises their rates or better yet if the media has a special package that give you a special rate on advertising.

How to plan your advertising monthly budget.

Grab a calendar and schedule your advertise month by month for the entire year. You will want to plan out your advertising promotions and your sales for the entire year. Do not over do the sales. If you have a sale every month it won’t take the public long to figure out that your sales really aren’t sales at all. If you have to have a sale every month to do business, change your image to a discount store. Don’t plan a sale more than once a quarter. As you plan your advertising for the entire year, keep in mind the swings in your business cycles. Advertise heavier during the months that are generally good for you and cut back when sales are lighter. But be sure to advertise every month. Remember the advertising you do this month may not produce a customer for 2 months. When your customers need your product orservice you want them to think of you. They may remember last month’s advertisement when they are ready to buy. In reality you are building a place in your customer’s sub-conscious and that’s the best place to be.

Always remember DON’T ADVERTISE AND NO ONE WILL NOTICE.