Getting ready to allocate your ad budget? If you're like most small businesses, you could use a lot more ad budget and lot less waste. How do you appropriate the right amount of ad budget to generate business?  Here are 4 questions to ask before you buy.

 

1. What percentage of your customer base is repeat business? 

2. How much of your business is referral based?

3. What percentage of your revenue is walk-in business?

4. How much of your customer base comes from special events, promotions, and sales team activities?

 

Once you determine the percentage of your customer base that comes from these different activities, you can more clearly allocate dollars to market to those efforts. If, for example, 30% of your customers come from referrals, it would make sense to spend an equitable portion of your ad dollars on marketing to current customers, with an eye on extra-stellar customer service and training, loyalty programs, and coupon or sales incentives.

 

No single activity is going to generate 100% of your customer base, nor will any one advertising vehicle suffice. You have to circle the marketing wagons to generate your market share. Use these percentages to help you make the right decision when faced with marketing options.