Do you know the value of each visitor?
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| by Hans Hasselfors |
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 The success of any store that sells
products or services relies heavily on traffic. Whether
walk-in, telephone, or web site visitors, each person that
in some way contacts you has a value to your business.
Yes, even the problem people, the random visitors, and the
tag-along husbands have a value.
Being aware of how much each person is worth in dollars is
extremely important. This will help you maximize your
income while minimizing your marketing expenses.
Most business owners do not take the time to determine the
value of each visitor. Why? Because business owners may be
experts in furniture, hardware, plumbing, or teeth, but
they hate the paperwork side of business ownership.
Let us take a look at a quick and easy way to assign a
dollar value to each person who calls or visits your
business. And how it can increase your income this year,
as it has for so many others.
Very simply, take the total sales each week. Divide it by
the number of people that visited and called you. This
assigned value will become more accurate and more
important each week. You add this week's visitors to all
previous visitors, and this week's sales to all previous
sales.
If you have a walk-in business, such as a furniture store,
put a traffic counter on the door. If your door is used
for both entry and exit, divide results by two to avoid
counting the same people twice.
Keep track of the phone calls too. Have a pad by the phone
to record the name and phone number of each caller. This
is just good business sense. You, no doubt, are doing this
already.
Now, for example, let us say that for the month of May you
had 3000 walk-ins and 500 phone calls. Add these together
for a total of 3500 visitors. Your sales for the month was
$33,000. Divide $33,000 by 3500. You have now established
that each visitor is worth $9.43 in gross sales.
Now you have an accurate way to measure your in-store
marketing strategies. You can quickly see the results in
the rise or fall of the "per person" value in
sales. These tactics might include how you arrange your
merchandise. Also, suggesting additional items that will
complement the visitor's purchase. Also, setting up
specific displays with colorful signs or banners tied in
with special or seasonal themes.
Be creative. Scout out your competition and similar stores
in other towns. Here are a couple proven strategies that
are very effective.
Hamburger stores have found that offering a
"super-size" package dramatically increases the
per person value. They have found that it is much easier
to get additional money out of people who are already
committed to spending money with you than to sell a new
customer.
One grocery store, when setting up an Italian dinner
display, will include all the accessories in the display.
Wine from the liquor department, French bread from their
bakery, and Parmesan cheese from the dairy department. The
customers love it and it dramatically increases sales.
Ok - you have optimized your in-store marketing. Now you
can look at buying more traffic with external marketing -
such as media advertising.
But, before you spend a penny, you need to take the
"per person" value one step further. You need to
establish the per person gross profit.
The average percentage of profit needed to stay alive may
vary from 200% for a jewelry store to 2% for a grocery
store. Most stores and service businesses average around a
40% margin. We will use 40% for this scenario.
Let us say you have increased the per person value to
$14.90 gross sales by fine-tuning your in-store marketing.
Your margin of profit is 40%, so each person is worth
$5.96 in gross profit. Now you know for sure you cannot
spend more than $5.96 per person to profitably bring them
into your store.
For example, you spend $1000 on a TV advertising campaign.
It increases traffic by 200 people. You have spent $5.00
per visitor. The advertising paid for itself, but barely
shows a profit. Your next marketing effort may be a $1000
newspaper program. It brings in additional 300 visitors.
You paid only $3.33 per visitor. This would be quite
profitable. Obviously, this is one marketing plan that you
will want to repeat over and over again.
Additionally, knowing the value of each person in gross
profit will help you eliminate expensive junk marketing.
Junk marketing includes advertising on phone book covers,
posters, maps, and the like. In fact, yellow pages are
quickly becoming a poor investment.
For example, a salesperson asks you to put an ad on a
fishing contest poster. Quite likely, it may only bring in
one or two visitors, if any. You wisely determine that the
most you can spend on this would then be about $12.
Anything more should be considered a donation, not a
marketing investment.
Numbers not your cup of tea? Follow the example of Henry
Ford. Do only what you do best, and wisely hire out the
rest. Train and empower a family member or fellow employee
to become essentially involved in the success of your
business. They can take care of tracking the numbers and
you can do the brain work.
Establishing a value for each visitor is simple. It is
essential. It is powerful. It puts you in total control,
no matter what the economic cycles throw your way. It
gives you a way to measure the value in dollars of every
new marketing idea you implement.
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| About
the Author: This article was published by Hans
Hasselfors, from http://www.SubmitYourNewArticle.com.
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