A man saw an ad for a popular online movie theater and decided to subscribe to a 14-day trial period for 0 rubles. During this time, he will definitely start watching several series, he will like that the episodes are shown without advertising, they are all collected in one place and, in addition, you can choose the best quality, add subtitles, voiceover, etc. When the trial period ends, he will pay for a subscription for the next period. And he will do this for several months. Such a man can be considered a loyal consumer, and there is no need to lure him with advertising every time.
Companies should not be afraid of exceeding advertising costs over revenue. At some stages, this situation is quite normal. Especially if we are talking about the initial stage, when the target audience is just beginning to recognize the brand. It is important to consider the business sector. For example, a billion rubles were spent on building a plant, and in a year it brought in 300 thousand in revenue. It seems that this is a complete failure and such activity is ineffective. But you can’t evaluate work of such a scale in just a year; conclusions are made after several years.
It is incorrect to include only the israel email list cost of advertising placement in the numerator of the DRR indicator - it is necessary to take into account the budget, the salaries of the team's specialists, and the costs of software.
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Tracking indicators over time
It is important to remember that the channel's payback is not a compelling reason to focus exclusively on working with it. It is always good to have an alternative option.
The thing is that increasing the budget initially has a positive effect on the growth of applications from clients. Then, as a rule, there comes a period when applications become fewer, the graph reaches a plateau. And even a significant increase in the budget with the same advertising campaign settings is not able to significantly change anything in this stagnation. It is necessary to monitor how and under what circumstances the decline in applications began. As soon as this becomes clear, you will not have to waste money and increase the budget. It is worth working on changing the advertising parameters. That is why it is so important to track the DRR indicators in dynamics.
Growth of indicators in dynamics
Source: shutterstock.com
This situation is related to the limited capacity of the market. There is a certain demand for any product. You can invest as much money as you like, even more than you need, but it will not have any effect and, moreover, will not increase the number of people willing to cooperate with the company. Unless, perhaps, after some time. It is worth clearly understanding that in a situation where the advertising budget increases, and the DRR also increases, you must immediately begin working on optimizing the advertising campaign.
Calculating the share of advertising expenses in dynamics makes it possible to record another important indicator - the seasonality of the business. It is clear that there will be no rush for Christmas tree decorations in the summer, which means that you do not need to spend as much money on their advertising at this time as in winter. And all managers of such seasonal businesses as selling New Year's goods, renting roller skates and bicycles, inflatable attractions, etc., need to calculate the DRR several times a year.