Advertising-Online & Offline-How much does a new customer cost your handcrafted jewelry business?
Half the money I spend on advertising is wasted; the trouble is I don't know which half.
John Wanamaker
US department store merchant (1838 - 1922)
Coming from a medical background (15 years as a clinical scientist), I felt like a fish out of water when it came to advertising!
When I first started my business, I primarily did private jewelry trunk shows and my only form of advertising was word-of-mouth. Would you believe I didn't even have business cards or a business name? I was just making jewelry and it was selling!
With every show, my customers told me what they wanted from me and I listened! =) Of course, I got business cards printed with my business name, Designing-Diva Jewelry Creations , and contact information. I started asking for feedback at the end of trunk shows regarding display and presentation and some of my best ideas are a result of a customer comment. Thanks you know who you are! I started accepting credit cards and boy wouldn't you know it my sales doubled at the very next show. Duhh!!
Okay, hang in there...this may be below a lot of folks but for newbies I really want to show we all start somewhere..and I'm not ashamed to admit my many blunders!
At this point, I started thinking hmmm..this could be something I do full-time because I love it and then the learning curve really started! I thought that I knew quite a bit because I had several successful private trunk shows under my belt. Boy, was I green.
The first retail event I attended was a steep learning curve. I plunked my $250 booth fee down without even asking anything about the show and was oh so disappointed when a paltry 100 people showed up over 2 days. Needless to say, I just gave away $250!
I started researching various shows and how they advertised, how long they had been doing the show, and on average how many people attended. This is something I should have done in the first place. I told you I was "green". This research paid off as I was fortunate to get into some good shows that really marketed (tv, newspaper and radio) and offered co-op advertising for vendors which really made it very affordable. I had great turn outs at these events and people sought out my booth and jewelry because I had advertised. Yep, the little light bulb went on. I'm now very picky about the quality of retail and wholesale shows I go to and it has paid off.
After 2 years, I split my advertising focus between offline and online ventures but have had the most success with online advertising. I think that it is easier and cheaper to test ads online. You can see fairly quickly (click through rates and conversion results) how you ad dollars are at work....ie How much does a customer cost? I bet you thought I would never get to this part! =0
For my business, I've had the most success with product reviews and advertising on targeted sites. On average, it costs me ~$10 to get a new customer. I have a lot of repeat customers. How do I know? All my customers are assigned ids because I have a customer loyalty program, Diva Bucks, that I issue with every purchase. I know who my best repeat customers are and I treat them well. Not just because they buy but because they advertise for me without even realizing it. I can't tell you how many times I've been contacted for custom work because of what my best customers wore to an event! Woohoo!
IMHO, that $10 to buy a new customer is worth it because it just keeps paying for itself...over and over....If you do not know how much a new customer costs you, you better start tracking how much you spend on advertising and where your customers are finding you to assist you where you need to focus!
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