hen I opened my pottery store in 1988, every kind of advertising found its way to my doorstep. The newspapers, the radio stations, the specialty items and the big-event folks all had a terrific way for me to spend my advertising dollars, according to them. The local New York Times-owned newspaper gave a seminar on advertising venues for business people like me. They put the base figure for an advertising budget at 15 percent of gross sales.
A new business owner full of enthusiasm could waste a whole lot of money in the wrong advertising areas, and I’m certain I wasted my share. How do I know? Advertising is not easy to measure. But experience has shown it can and should be done.
If you’re establishing your advertising budget and plan, or evaluating an existing plan, consider the advice of experts Jane Bunch, a business counselor from the Small Business Development Center in Tampa, Fla., and William E. Gregory Ph.D. who teaches advertising at Florida Southern College in Lakeland, Fla. Both were guests on the Craft Retailers Association for Tomorrow (CRAFT) teleconference, entitled “Common Issues, Common Concerns: Advertising.”
Both are very familiar with American craft retail stores and the CRAFT member retailers on the telecon were from across the United States, representing large and small galleries.
Bunch and Gregory, as well as CRAFT members, suggest starting at approximately 5 to 6 percent of gross sales for your advertising budget. If you’re located in a mall, use 1 to 2 percent. Most of us on the telecon were using a 3 to 4 percent. If you can spend a little more, you should.
To plan for spending advertising dollars, first take January’s sales and divide by the year’s total sales. This will give the percentage of sales for the first month. Do this for each month. You then have the sales pattern for the year. If possible, do this for the last couple of years.
If January shows 10 percent of the year’s sales, then set aside 10 percent of your 5 percent advertising budget for January. If 20 percent of sales are in November, use 20 percent for November. Spend according to your sales pattern.
Revisit your advertising strategy every two to three months. See what seems to be working. Train your sales staff to ask, “How did you hear about our gallery?” We keep a record of those responses.
Coupons are a way of measuring response. When we send coupons, we attach the returned ones to the sales slip and evaluate at the end of the program. There are statistics that show that many people do not use the coupons, but they do serve as a trigger to visit the business.
According to Bunch and Gregory, direct mail is still the most effective advertising for craft retailers. It goes directly into the hands of our targets. They also suggest using ads in the local newsletters of targeted groups.
A well maintained mailing list is essential. Most point-of-sale (POS) software allows one to gather that information. In my stores we know who bought what since 1993 and the staff knows how important this information is. We sort out who we want to receive our direct mail. We never share our mailing list.
Don’t overlook NPR (National Public Radio) if you’re using radio. It’s our target market and the only one where customers will thank you for supporting it.
Be firm with the media. If they mess up an ad, insist on a free replacement. Ask for good placement. Do not let them put you in the gutter. It is your advertising dollar.
Educate yourself — there are some great resources available. Start by finding the nearest Small Business Development Center. Go to their advertising seminars, which have a minimal charge. Use their certified business counselors. It’s free objective advice. Their goal is to help you, as a member of the business community, survive and grow.
The information in this article was adapted from an article by Gloria Brooke, which originally appeared in the May 2004 issue of The Crafts Report.