Setting Your Advertising Budget
As a business owner, you know that advertising is important. After all, how else will potential customers know that you exist and what you have to offer? But determining how much to spend on advertising can be a tricky proposition. Too little and you’re not getting your brand in front of enough people. Too much and you’re wasting valuable resources. So, how do you strike the perfect balance? Fortunately, our team at Phvntom is here to help.
How We Can Help
Our team will help you determine the proper amount to spend on advertising by comparing your average cost per conversion with your maximum sales capacity. This way, you can make the most money possible without wasting ad spend or missing out on customers.
Determining Your Average Cost Per Conversion
First, we’ll take a look at your average cost per conversion. This is the amount of money you typically spend to acquire a new customer or convert a lead into a paying customer. To calculate this number, simply divide your total advertising budget by the number of conversions you generated over a set period of time. For example, if you spent $1,000 on advertising last month and generated 10 new customers as a result, then your average cost per conversion would be $100.
Finding Your Maximum Sales Capacity
Next, we’ll look at your maximum sales capacity. This represents the maximum number of sales that your business is capable of generating in a given period of time. To calculate this number, multiply your average order value by the number of transactions you’re able to fulfill in a month. For example, if the average order value at your store is $50 and you can fulfill 10 transactions per month, then your maximum sales capacity would be $500.
Knowing these two numbers will give us a good starting point for setting your advertising budget.
From there, we’ll work with you to determine what kind of ROI (return on investment) you’re looking for from your advertising campaigns. Once we have that information, we’ll come up with a customized plan that’s designed to get you the results you want while staying within your budget constraints. And because we’re always keeping an eye on industry trends and new innovations in online marketing, you can rest assured that your campaigns will be using the latest and greatest techniques to reach your target audience.
Don’t leave something as important as your advertising budget to chance—let our team at Phvntom help you maximize your ROI and get the most bang for your buck. Contact us today to get started!