Whether you can afford mass media — radio or TV — usually depends on two factors:
- how big your town is, meaning how expensive your media is to buy, and
- how big you are in terms of revenue
Your profit margins also impact this, as the higher your profit margins, the more money you have to spend on advertising at the same revenue size.
But assuming decent margins and a location that’s not in or in the shadow of an expensive mega-city, the mass media tipping point usually comes at around $2-3 Million in revenue.
Please understand that this is very much a ballpark figure, but if you’re looking for a rule of thumb, there it is.
So assuming you pass the benchmark, here’s how to tell if you can’t afford NOT to use mass media…
- If you’re suffering from being on the pay-per-crack treadmill, aka, paying way too much for digitally-sourced leads…
- If you’re attracting too many price-sensitive leads…
- If you’re stuck in the middle between larger and smaller competitors…
- If you’re trying to de-commoditize yourself and fatten your margins…
- IF you’re getting beat-up by low-priced competitors…
Then chances are you can’t afford NOT to use mass media once you’ve crossed the revenue threshold to afford it.
Basically, if you’re doing, say $2 million in sales and you calculate an advertising budget of $200K in total, then you should be able to carve out about $100K for mass media branding.
And that’s more than enough to get started in most markets —
Jeff Sexton
Businesses either sell $5 haircuts, or fix $5 haircuts. I’m your guy if your company fixes $5 haircuts. Working together, we'll de-commodify your business, make pricing pressure a thing of the past, and grab the lion’s share of customers willing to pay a premium for your service or product.
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