I am curious about how much newsagents spend marketing their retail businesses outside their four walls on: advertising (newspaper, TV, outdoor), direct mail (catalogues), sponsorships (sporting and community groups) and in other promotions designed to promote the business outside the business.
I have always used 2% of revenue as a guide to marketing spend. By revenue I mean commission from lotteries, transport tickets, electronic voucher and agency lines plus sales for everything else – newspapers, magazines, stationery, books, calendars, diaries, ink etc.
Two newsagents I was talking with this week did not have a budget so we worked out the number. In calendar 2009 they spent under half of one percent of revenue on marketing. They were shocked when I suggested they quadruple this. They felt that being a newsagent should bring people in and that newsagent suppliers should do more to advertise newsagency businesses.
While I can understand the view that newsagents suppliers should promote the channel from a historical perspective, it is not appropriate today. Most of what we carry is in so many other retail channels that it is not appropriate to expect a supplier to promote us.
We need to market our businesses to bring people to us. This is best done in our local communities. All of what we spend in my newsagencies is designed to get people living and working near us to visit for seasonal, category and sale opportunities we promote.
We use a mix of direct mail, email and print advertising consistently throughout the year. This investment does bring in new customers. It also guides existing customers to spend more. The investment pays off.
While it is expensive to find a new customer, this is vital given the competition from other channels attracting shoppers to what we sell.
So, what do you spend as a percentage of revenue?
Mark, firstly newsagents, like any business need to understand firstly “how” to advertise. We need to understand how to get to our customers effectivly. Newsagents need to stop putting a $ on a return from advertising. We all need to see the bigger picture in showing our customer we are a proffessional bussiness able to match it with the big retailers. Advertising, no matter how it’s done need to be seen as an investment in the future of their business.
I agree. We also need to understand the difference between call to action advertising and brand building.
In my own experience, call to action works well for books, ink, gifts and stationery.
Right now, our book sale catalogue is driving excellent new traffic. But we had to invest to get that. The benefit,however, is not just this sale but future sales when happy customers return.
We are now advertising on facebook. Not only does it go to all associated to the page but it also goes straight onto our website. Upto date , current , advertising that we use the technology avaliable to us all. I believe actions like this makes a ” newsagency” stand out , not only amoungst other newsagents, but more importantly amoungst even some of the best business’s around.
Gerard while I think there are some customers online, there are still plenty to be found in other ways – direct mail, newspapers, billboards etc. The key is that newsagents promote outside their four walls in ways which find customers with easy access ot their bueiness.
Not enough are doing this.
Couldn’t agree more. Effective advertising needs to bring it all together. We must not fall into the trap of taking just on path. One theme covering using all mediums to get the goodwill of newsagents importance in any community is what is needed. Newsagent need to advertise their greatest asset…. we are still one the most visited retail stores in Australia….. Community, family business, local…. All words that need to be apart of a central theme of collective advertising .
Question: We have been hesitant to advertise due to not having lotto yet. We regularly have customers come in after lotto who can get quite irrate when they can’t buy their lotto from us.
Would you suggest advertising despite this? Would this have a negative impact instead of a positive one?
We have scratch-its but no indication on when Lotto will be here.
B, I have no Lotto in the Perisher Newsagency which is only open during the winter months. It is not cost effective for me to install Lotto given they previously wanted full installation costs.
Given the above and fact that I can’t even offer Scratchies I had considerable static from customers who were frustated in not being able to buy a ticket particularly around the larger jackpots. I tried putting up a few posters to draw attention to the draw and direct people to my main store in town but this only made matters worse and I copped a bit of abuse from customer frustration. I couldn’t offer scratchies as they have now been withdrawn from scratchie only outlets in NSW. I’m not really complaining but the return for four months of trading on low commission after paying year round freight just doesn’t make business sense in my case. This is not a stab at NSWL because I believe giving me an exemption would have created a difficult to manage precedent.
My suggestion, don’t adverstise as consumer interpretation follows that you therefore offer it for sale.