Riddell: Coordinating to get more feet
November 2, 2016
As the economy continues to stumble and bumble along, the pressures on small business continue to grow. Despite all recommendations and theories to the contrary, the very basic survival requirement is to increase sales. Recognizing this commercial imperative, there are many "coordinated marketing" firms all promising to be the one best solution. These firms, quite understandably, offer to coordinate all aspects of the marketing mix while generally focusing on social media and websites, with the expressed intention of giving the most "bang for the marketing buck." Unfortunately, many of the targeted small businesses do not take the time to think through just what "coordinated marketing" really means for their firm in terms of dollars spent for benefits derived.
A common selling point for coordinated marketing firms is increasing the number of clicks or views on a website. While this is certainly measurable and of benefit for some companies, for those whose business is grounded in bricks and mortar (like a restaurant), this metric can be very deceiving. Said differently, clicks from an interested party in Dubuque, Iowa, are probably not going to result in an increase in food or beverage sales for a restaurant in Grand County, Colorado. What does increase sales is usually more customers coming through the door also known as an increase in foot traffic.
The cost justification or analysis for implementing a coordinated marketing approach for a focused bricks and mortar/ restaurant is pretty straightforward. Virtually every owner/proprietor knows today the average number of customers who enter their premises. Most retail stores have a handle on what percentage decide to buy something and also know what their average transaction amount is. Restaurants can generally assume a 100 percent on the buying side and also know their average ticket amount. Once you have this information in hand, then the conversation with the coordinated marketing firm should be pretty straightforward.
All you are concerned about is simply getting more folks in the door, or viewed differently, the projected increase in foot traffic the coordinated marketing firm is promising. Simply take this number, multiply it by the percentage that buy something, and then multiply this product by the average transaction amount. If the profitability of this incremental business exceeds the cost of the coordinated marketing firm's services, then it is a good deal. If it does not, then you need to ask yourself why are you doing it? This simple analysis does require some measuring, but not a lot.
The savvy business owner and the confident coordinated marketing specialist clearly have an opportunity for mutual success. The business owner should ask for a performance metric requirement (as outlined above) and the specialist should ask for an "above market" fee for "over achieving" the performance metric. For the business owner, he or she is paying for the improvement with "sleeves off a vest." For the specialist, this is his or her opportunity to earn more dollars and establish a solid base for future references.
A former executive at Campbell Soups is famously remembered for saying that he was 100 percent convinced that 50 percent of his advertising dollars were working—he just didn't know which 50 percent. Times have certainly changed. No responsible business owner has the luxury of operating in ignorance. Take some time and think about what your business needs and then use coordinated marketing to help you get there.
Recommended Stories For You
Following a successful international business career, John Riddell turned his attention to small business/entrepreneurial pursuits that included corporate turn-arounds, start-ups, teaching, authoring business and sports columns and serving as VP for the Chattanooga Chamber of Commerce directing its Center for Entrepreneurial Growth.
Recommended Stories For You
Trending In: Opinion
- How does it work? | Starting an avalanche: CDOT preps Gazex avalanche exploders for coming winter months
- New ski frame allows skiers to wear snowboard boots
- First phase of new Granby park nears finish
- Teen who fell from Hotel Colorado balcony regains consciousness but condition still ‘extremely critical,’ her mom says
- Hot Sulphur Springs residents awake to find brown tap water