The Building Blocks of marketing: A How-to guide to Estimating the Effectiveness of Marketing Strategies
With the tagline and a firm idea of identity I went into step two: drafting press releases and covering emails, creating content for the website and material like posters and flyers. But how do you decide what to spend you money and energy on?
There is a formula I use to work out how valuable a certain strategy might be. I made it up based on common sense, high school maths and general reading. If you can spot any problems I’d love to improve it. Basically answers the question: How likely is it to pay for itself?
Stage 1: How many people does it need to bring into the theatre to pay for itself?
(unit cost x number of units) / (minimum ticket price) = number of tickets you need to sell
Then take that number and compare it to the number of units. How likely is it to bring in those audience members?
Ticket sale target / number of units
This gives us a ratio to compare
So Case Study time! The design stuff is pretty straight forward for me, being a designer myself. I decided to make a thousand business card format flyers and distribute them. I handed them to people who wanted to know what I was up to. I left piles at coffee shops, bookstores, back packers, and had the magnificent Mwenya hand them out to her students. Yusrah recommended a super cheap printer out in Kensington 7th Avenue. They were R360 for 500, so we’ll plug that straight in:
R 720 / R50 = 14.4
Which means 1000 flyers need to bring in 15 people to pay for itself, sunk into a single value: 0.0015. We’ll call this number its minimum effective value. Of course this is pretty useless since we’re now just looking at it with our gut. Unfortunately until more people share their strategies and audience numbers it’s impossible to work out a statistically significant average effective value – and even then marketing is a remarkably tangled system. All we can do is rely on our personal experience to try figure out if the minimum effective value is greater or less than the average effective value.
What we need is a Fermi formula – a means of organizing our ignorance and generating a logical estimate – to find the average effective value.
number of days x number of distribution points x (daily average traffic at distribution points x percentage of population interested in theatre x percentage of people who notice ad)* x percentage of people who intend to come and follow through**
* this cannot exceed the number of units per point if it’s a flyer.
** this is the ‘facebook event’ phenomenon – the percentage of people who rsvp ‘attending’ and actually show up.
This is roughly the way that websites and advertisers work out how effective an advert is, except that they have detailed numbers returned to them so they don’t have to guess.
OK, so plugging in the guesses:
7 x 10 x (70 x 0.05 x 0.6)* x 0.4
This gives us a total of 58.8 to 1000 flyers or an average effective value of 0.058
I’m not going to lie, this system is spotty and I may have missed some obvious modifiers but the margin between the minimum effective value and the average effective value is wide enough that we can safely say that flyers are good value for money.
Is anyone still reading? The point of all of this is that I can remember graduating and planning how to advertise my shows and doing things because they were what everyone else did. Really there is a lot to think about and you can go about it in quite a logical way. You can maximise your efforts by concentrating on improving one or two aspects of the formula. You could increase the number of distribution points, or pick points with greater traffic. You could discard the idea of flyers entirely and concentrate on more noticeable strategies with greater visibility but higher cost, like banners or posters. These formulas also help you to be realistic about free strategies like Facebook events or emails, which is what I’ll be covering next.
With these ideas in my head I chose to do business card flyers, 20 posters only, and to focus on free strategies: emailing, Facebook, blogging and Twitter.