What kind of response rate should I expect for cable TV advertising?
I'm a mortgage broker and I'm starting to run television commercials. I'm trying to figure out how long I should wait to see a return on my investment for this type of advertising.From the day the first ad ran you should have already have been asking "How did you hear about us?" and tracking how many saw you on cable.
From there, you can start to realize what your conversion ratio would be, and then you need to determine how long you're going to track it. (hint: as long as you get calls saying they saw you on TV -- TRACK IT!)
Marketing is a testing process, you have to test, test, test. It will NEVER stop if you're smart about it. Why? If you don't test and track and tweak and test and track and..you get the idea, you'll never know where you're marketing dollar is best invested, and how much you can actually realize as a return (ROI).
As for response rate -- what was your objective when you decided to move forward with doing a cable ad?
Too often business owners go into marketing with the attitude of "I'll just wait and see." This is not the way to approach your marketing campaign. You have to have an objective in mind. Why are you going to seek out your next customers through cable? Why not direct mail? Why not radio?
But truly, the bottom line is branding, or how your customers react towards your product or service. In other words, if they already know you, your response should be good. If they don't, it may take some time before you start seeing results of any kind.
Response rates will vary according to the time your ads play on TV -- if you're in prime time you can expect a good amount of response, if you're on late night with the infomercials on local access channels that don't necessarily reach your target audience, you won't get much of a response.
Eventually you will become a familiar enough brand for customers to call in and actually ask you what you do. Once that happens you should go back to tracking, and then figuring out your full rate of return once you've stopped receiving calls on that particular campaign. You need to figure out a way to track your marketing efforts all the way around. Reason: TV may not be the best place for you to be right now...it may be in direct mail, it may be on radio as a local expert in finance. (hint hint)
Because you are advertising locally there's only one way to figure out what the rate of return will be -- ask the rep that sold you your ad spot what the numbers are for viewers and figure about 2 percent will actually call you.
Bottom Line: Make sure you're tracking everything you do, then you can get a feel of what your market will produce for your business. Figuring out your conversion ratio will help you figure your actual return on your investment, tweak it and make it better and go again.
By the way, cable advertising is getting cheaper. Search Google for "cable advertising rates."
Michael H Kaleikini is a business development consultant and founder of Business Refinement, LLC in Henderson, Nev.