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[BizTalk] Advertising percentage


#1

I am wondering what percentage of my total sales should be spent on
advertising. Anyone who has any kind of formula for this, I would
greatly appreciate some advice.

Julia


#2

Like most things is business, there are no rules here. I know of
successful jewelers who spend 10% of their gross on advertising and
others, also successful, who rely solely on word of mouth. I just
know that if you do it, you need to have a plan and keep at it for it
to work. A little bit here and a little bit there doesn’t seem to
produce the desired results.

Mark


#3

The figure I hear most is 7%. Which is more than I’d ever voluntarily
spend, except for the time I contracted a professional promotion
company. I had grave reservations about the ad budget but put my
trust in them. At first i was sick seeing what i was spending with
only meager results. then the event started catching on and sales
went thru the roof. Trouble was as time went on net profit dropped so
there came the point where the big ad budget became
counterproductive. The company was amazingly accurate in their
predictions but when it was time to stop it was time to stop.

I guess what I’m saying is income does not necessarily coincide with
dollars spent on ads.


#4

I wanted to share about this area.

The “good” number to use is if you ADD rent and advertising
together, it should be, give or take, 13% of total sales.

So if rent is 5% of sale, you can afford to spend 8% on advertising
(5+8=13).

Next…

A jeweler I’ve helped who is great at this gave me this formula.
Take your “8%” and divide it up over 12 months, but not like you’re
used to. divide up advertising budget into 16 parts and spend a
portion each month. Like so…

(example only) spending $16,000 a year on advertising, divide it
into 16 parts means spending $1000 a part.

Month Spend this Spend this divide over
number of parts amount the month

Jan 1.0 $1000 $250 a week
Feb 1.5 $1500 $750 ea first 2 weeks only
Mar 1.0 $1000 $250 a week
Apr 1.0 $1000 $250 a week
May 1.5 $1500 $750 ea first 2 weeks only
june 1.0 $1000 $250 a week
july 1.0 $1000 $250 a week
Aug 1.0 $1000 $250 a week
September 1.0 $1000 $250 a week
Oct 1.0 $1000 $250 a week
Nov 1.5 $1500 $750 ea last 2 weeks only
Dec 3.5 $3500 $875 each week til 24th.

Advertising each month brings in more at xmas than spending exactly
the same dollars for the year but only spending that in the last
quarter.

David Geller
www.JewelerProfit.com