ROI is the Top Priority

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Mar 9, 2009 by Mark Maier


What questions do you need to ask your clients to show them how to measure Return On Investment? 
8 questions that they answer and one that your provide make this an easy exercise to determine if their advertising is effective:
1. Total Investment (this is a great time to recommend OES schedules that make the most of your audience and get the biggest return for your clients as they reach over 50% of your audience at least 3 times..the exposures needed to trigger the buying motive if they are in the Buyers Awareness Cycle)
2. Duration Of Investment (another chance to sell annual business campaigns that tie back to the Buyers Awareness Cycle, you can reinforce the need to continually advertise as potential customers are entering and exiting the buying cycle every day)
3. % Return On Investment (setting realistic expectations with your clients is very important, everyone would like stellar percentages, Wall Street has tanked with returns below 7% over the past 5 years and CD's are returning less than 5% so wouldn't your clients be happy with a reasonable return of 20%)
4.  Initial Average Sale (this is the original sale of the product or service to the consumer. In example, membership to a health club is $40.00 per month with a year contract so the )
5.  Incremental Customer Value (anything associated with the Initial Average Sale that the consumer adds to the sales over the initial period of time of the initial average sale)
6.  Customer Lifetime Value (total dollars that the customer is worth over the customer lifetime)
7.  Profit Margin (not markup but margin, some clients won't tell the actual percentage so be prepared to get an average, accountants will tell you that most businesses cannot survive on a margin less than 35%)
8.  Closing Ratio (if ten customers come into the store, what is the average percentage that buy?)

Here is the other question that you need to provide the information for:
9.  Number of Listeners (this is the total cume of either your station(s) or the specific demo that your schedule is targeting, because we are set up to target a week at a time, use your cume Monday-Sunday 5a-midnight.  This is a very important piece that you put into the formula as it helps us determine if the schedule can deliver 1% or less of the cume that can become prospects.  It is very important for your clients to understand that in any given audience 1% or less are in the Buyers Awareness Cycle at any given time)

The easy part is inputing this information into the EFS Generator and placing it in your proposal to explain the Return On Investment your clients can expect and the relatively small number of prospects it will take to get the return you have agreed upon.

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