Many small distributors consider their business a job. If they net $200,000 on a book of business grossing $500,000, they deduct their expenses from their net and allocate the rest as their salary and bonus. These expenses can add up. Fees for SAGE or ASI. Pay for full or part-time staff. Travel and entertainment, utilities, and many more itemized expense lines. What is rarely seen in this $500,000 gross business is “Advertising”. Some may have marketing expenses such as a lumpy mailing program, but traditional advertising is too expensive.
The rule of thumb for advertising has been constant for years. Business consultants in concert with financial advisors recommend an annual advertising budget of 8-10% of sales. Using that number, a small distributor seeking online sales or a lead would budget $4,000 to $5,000. That won’t buy much in the analog advertising world, but it can achieve results in the digital world. In an earlier column I wrote about “geo-fencing”. That is still a tactical weapon that can get big results. Take the largest possible buyer in your area. It can be an industrial, a school or non-profit. If you geo-fence, you are pinpoint targeting potential buyers. You can also focus your spending other ways in this digital era. For the small business, the spending should be apportioned to a variety of outlets.
Google ads are worth a test and an allocation of 30-40% of your budget. Google has many different ways to spend: Search ads, display ads, local service ads and geo-targeting. The tighter your target market, the lower the cost and more productive the results. All of these “ads” are triggered by key words you identify. A key word such as bag, pen, mug, key chain may have a lot of bidders to have their name up on top for clicking. It is true that browsing buyers rarely go beyond page one. I did it on Google to see who comes up. The entire first page was filled with advertisers. The company that bids the most got the top and then down the line to other lower bidders. I went three pages deep before I found a somewhat local source about 60 miles away. I also found numerous industry suppliers seeking my business “direct”.
Meta (Facebook & Instagram) may be productive and worth a test but, unless your target demo are prospects such as schools and social organizations, it may not be the best source. We know it works to sell a single direct product, but it is questionable in catching a prospect for a general sourcing ad.
LinkedIn is well worth a shot. A LinkedIn “message ad” can get you local businesses. LinkedIn ads are more expensive, but they reach corporate decision makers. Here, if you target HR, Safety, Marketing, or specific buying areas, it may cost more, but one significant lead can pay you back and fund more advertising in the years ahead. A ballpark number for LinkedIn is that a $1,500 spend can return 1,500 – 4,000 clicks. There is a lot of skill and knowledge needed to direct your budget to the best tools.
My readers know I am a veteran of the industry having joined before the internet, before the fax machine, before the personal computer and before our explosive growth. I joined when cold calling was the best way to open doors and purchase orders were sent along with ad slick logos. Well, this ain’t your daddy’s industry. The barrage of TV big box distributors is gradually taking away buyers. Some of the techniques from “my day” still work well. Doing local trade shows, networking, referrals and good public relations are effective. However, year after year, buyers drift to the internet and you need more than a website. According to Google, the landing page on your website is one of the most important factors in which bid to take to get you a PPC lead. Your website metrics may get a lot of hits, but it certainly is filled with robots scraping the net and not real people exploring you.
I have relentlessly suggested to regional associations that they take their money and promote working with local professional companies. That is called advertising synergy. Whatever they capture is made available to all paid members. The best they can offer is their membership directory but, if they develop the right program, they will be telling the world that their membership has the best sources.
It takes money to make money.
Google
- Google Search Ads - Target business owners searching for promotional products.
- Google Display Ads- Show banners on websites that local businesses visit.
- Google Local Services Ads - Good spend if you offer consultations & local service.
- Targeting - Use geo-targeting to focus on your area, and bid on high-intent keywords
LinkedIn
- Great for targeting decision-makers & corporate buyers.
- LinkedIn Message Ads to directly message small business owners in your area.
Today’s distributor company cannot sit on their hands unless they do not want significant growth. The market is drifting away.
Joel D. Schaffer, MAS is CEO and Founder of Soundline, LLC, the pioneering supplier to the promotional products industry of audio products. Joel has 48 years of promotional product industry experience and proudly heralds “I was a distributor.” He has been on the advisory panel of the business and marketing department of St. John’s University in New York and is a frequent speaker at Rutgers Graduate School of Business. He is an industry Advocate and has appeared before the American Bankers Association, American Marketing Association, National Premium Sales Executives, American Booksellers Association and several other major groups. He has been a management consultant to organizations such as The College Board and helped many suppliers enter this industry. He is a frequent contributor to PPB and Counselor magazines. He has facilitated over 200 classes sharing his industry knowledge nationwide. He is known for his cutting humor and enthusiasm in presenting provocative and motivating programs. He is the only person to have received both the Marvin Spike Industry Lifetime Achievement Award (2002) and PPAI’s Distinguished Service Award (2011). He is a past director of PPAI and has chaired several PPAI committees and task forces. He is a past Chair of the SAAGNY Foundation, Past President of SAAGNY and a SAAGNY Hall of Fame member. He was cited by ASI as one of the 50 most influential people in the industry.