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Yellow Page Advertising, Part 4: Return on Investment

Anyone who’s read a business book or gone to college should know ROI is a number derived from a simple mathematical formula.

Ian Sohn over at Flagged For Follow Up made that statement on a blog post about ROI. He’s absolutely right. Here’s a simple mathematical formula:

1. How much revenue do you want your advertising to generate each month?
Pick a realistic number. In my hypothetical example, I’ll use…

$5,000

2. What is your average sale?
If you have multiple products, think about what your average customer spends.

$1,000

3. [Now divide $1,000 into $5,000.] The number of sales you need is:

5 sales

4. How many prospects must you speak with to make 1 sale?

6 prospects

5. [Now multiply 5 sales x 6 prospects.] The number of calls you need is:

35 calls

So to sum it up, 35 calls a month would result in 5 sales and bring in $5,000 a month.

This is an example of what a transmission shop could expect from Yellow Page advertising.

Remember in my previous post that I said you could get significant advertising in many independent directories for less than $3,000 a year? Spending $3,000 a year to get $5,000 a month x 12 (i.e., $60,000) is a 20:1 return on your investment.

And they say Yellow Page advertising doesn’t work…

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