How to Know if Your Marketing Money are Being Well Spent
Restaurants that gross over Rs. 10,000,000 annually report spending from 2-4% of revenue on marketing. The most successful operators track their promotions so they know where they’re getting the most bang for their buck.
Tracking the success or failure of your promotions can help you to maximize your marketing dollars and prevent throwing your hard-earned cash down the drain by identifying the rate of return on your marketing investments.
So, before you commit funds for another newspaper ad or a buy-one- get-one-free coupon, make sure you have a system to measure the success or failure of the promotion. Some important factors to consider when evaluating marketing success include the following:
- Know the number of potential recipients of your promotions.
- Track all expenses associated with the promotion including printing costs, postage, advertisements, etc.
- Know the cost of sales for all give aways. If you give a free dinner, the cost of that dinner is an expense.
- Track the associated sales that accompany each redemption. Most guests using a coupon or gift certificate will usually be accompanied by additional guests and will traditionally spend more. These are the sales that determine the success of the promotion.
- Calculate the return on investment for each of your promotions.This is accomplished by dividing the resulting sales of the promotion after the cost of sales has been deducted, by the expenses incurred.