% to spend on Advertising

**Matt Fellman** · 03-16-2011, 05:49 PM

I'm really talking about staright cost... not your time since, of course, that's free

Things like Yellow Pages, direct mail fliers, email programs. I suppose it would also include website development and optimization.

Do any of you have a target % as a function of sales that you aim for?

I never really have.... which is, of course, why I'm asking.

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**Dan Harris** · 03-16-2011, 06:05 PM

Originally Posted by Matt Fellman

I'm really talking about staright cost... not your time since, of course, that's free

Things like Yellow Pages, direct mail fliers, email programs. I suppose it would also include website development and optimization.

Do any of you have a target % as a function of sales that you aim for?

I never really have.... which is, of course, why I'm asking.

Over the past 10 years I spent apx. 15% of my gross on advertizing.
Web site , advertizments in small commuinty papers, direct mail, $2-4 goodie for each customer, pens and note pads.

Ron Bibler · 03-16-2011, 06:27 PM

I spent $ 3,500.00 last year. and I need to kick that up this year to $ 4,500.00 or more this year.

I'm working on a new video for U-tube and TV spots... That should be fun...

Every one is after a fewer and fewer inspection each year.

Dog-e-Dog...

Best

Ron

**Dan Hagman** · 03-16-2011, 06:39 PM

I spent about a $1.50,,,,,, all word of mouth!

**Scott Patterson** · 03-16-2011, 06:46 PM

Originally Posted by Matt Fellman

I'm really talking about staright cost... not your time since, of course, that's free

Things like Yellow Pages, direct mail fliers, email programs. I suppose it would also include website development and optimization.

Do any of you have a target % as a function of sales that you aim for?

I never really have.... which is, of course, why I'm asking.

A good percentage to shoot for is 3% to 4% of your sales. This holds true with just about all retail and service related professions.

So if you are doing $60,000 a year in sales your advertising budget should be around $2,400 at 4% and $1,800 at 3%. This is just a guide but it works well when planning.

Ron Bibler · 03-16-2011, 06:49 PM

Dan you have not been around long enough to piss everyone off

Or you need to go into politics

Best

Ron

Ted Williams · 03-17-2011, 07:17 AM

I was always taught that ten percent of revenue should go towards advertising. The trick is figuring out the optimal way to spend that ten percent. I know over the years I've thrown away thousands with misguided ads and/or listings. Live and learn.

**Dan Hagman** · 03-17-2011, 06:49 PM

Sorry Ron

I know I'm still the rookie! an old rookie too!

**Bob R** · 03-26-2011, 02:57 PM

Originally Posted by Robert Humphries

Matt,

I'm from the advertising industry. I'm not sure where most of these guys get off telling you what percentage to spend (no offense guys). It doesn't work like that. What you are looking for is ROI conversion. If you spend 10% of your budget on something that only increases your gross revenues by 2%, then you are wasting your money.

It's like weight loss. People set goals to lose pounds, but what they are really after is "how they look" in a mirror. If losing ten pounds doesn't get you to where you want to be, then it won't feel worth it, and you'll quit.

Worry less about how much you spend and more on what tactics and strategies are most effective in converting strangers into inquiries and inquiries into sales.

Hope this helps.

Robert

-

I am not in the advertising bus. but from what I've learned from running various businesses the above statement is absolutely true. If your spending XXXX.XX and it's making you XX.XX you need to quit and re-evaluate your Ad campaign. Although tracking your "Return on Investment" can be a bit of a pain.