How much do newsagents spend on marketing?
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?