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Dynamic Chiropractic – November 1, 1999, Vol. 17, Issue 23

Proving the Return on Your Yellow Pages Advertising Investment

By Clint Pollard
Whether your business is large or small, you probably don't have a huge advertising budget. However, since in most cases you have to advertise to succeed and grow, you probably rely heavily on two old standbys: word of mouth and Yellow Pages advertising.

While you can certainly encourage your customers to pass along a good word about your practice, ensuring that they do so and quantifying the results of word of mouth advertising is difficult at best. On the other hand, proving the value of your Yellow Pages investment can be quite easy. It's also invaluable, especially when nearly 18 billion references are made to Yellow Pages directories every year. That's 1.7 times every week for the average American.

Return on investment (ROI) can be more simply described as a measurement of how well your advertising is working. But how do you determine your ROI and turn your advertising dollars into customers and profits? The best way to determine your ROI is to follow this simple seven-step approach. It shows you exactly how to measure the effectiveness of your advertising.

Step One: Begin by determining the number of calls you receive from your Yellow Pages ad each month. This is easy if you have caller ID. If not, ask each caller where they found your number. If you live in an area that has two directories, be sure to ask which directory and on which page.

Step Two: What's your conversion rate? What percentage of your calls turn into sales? You should have a good idea of your conversion rate. If you don't, take a look at your yearly sales figures.

Step Three: Determine the number of sales made by those customers that found your business in the Yellow Pages by dividing the number of calls by your conversion rate.

Step Four: Plug in your average gross profit per item sold.

Step Five: To determine your total gross profit produced by Yellow Pages ads, multiply the number of converted calls from Yellow Pages ads by your average gross margin.

Step Six: Plug in your monthly Yellow Pages investment.

Step Seven: Your overall net profit gain from Yellow Pages advertising is calculated by subtracting your Yellow Pages monthly investment from the total gross profit produced each month (sales minus costs).

Let's use an example with some figures. Say your business receives 100 calls in a month and the call conversion rate is two. Take 100 and divide by your conversion rate (two) to get 50 (the number of sales attributed to Yellow Pages customers). If your average gross profit per item sold is $50 and you multiply that figure by the number of sales made to Yellow Pages customers (50), you arrive at a total gross profit of $2,500.

If you determine that you spend $600 per month on your Yellow Pages ad and subtract that number from your total gross profit, you will arrive at your net profit gain. If these were your numbers, you would have received $1,900 per month in gross profit over and above the $600 investment you made in your Yellow Pages ad. Following this formula aids in the marketing planning process and enables you to see how your advertising dollars are working and if they're being spent wisely.

Also keep in mind that your advertising investment is impacted by other crucial factors. One of those factors is your service team. The bottom-line goal - the actual return - of a successful Yellow Pages ad is to get your phone to ring. If the person answering the phone at your place of business isn't knowledgeable, prompt and courteous, your business will suffer no matter how good your Yellow Pages ad is.

Now to the ad. Naturally, potential patients look at a number of Yellow Pages ads before choosing. To have them choose you over the competition is the name of the game. Some specifics to the chiropractic industry illustrate this point:

• The estimated number of ads referenced in the "Chiropractors,DC" listing during the course of a year is 162 million.

• 57% of users indicate looking at one or more Yellow Pages ads.

• The average number of ads referenced among those looking at ads under the "Chiropractors,DC" listing is 7.1.

• 77% of users contacted a chiropractor with an ad in the Yellow Pages.

• 42% of users made a purchase after referring to a Yellow Pages ad.

To drive patients to your door, remember these four key elements to an effective Yellow Pages ad:

• Your ad must break through the clutter.

• Your ad should be relevant to your services, your business and your audience.

• Your ad should be believable and factual.

• Your ad must involve the reader.

Advertising - no matter what the medium - can literally make or break a business. What does this mean to chiropractors? It means that the Yellow Pages is one of the most powerful mediums available to reach potential customers. According to a recent study, the Yellow Pages considered the most informative and credible of the advertising mediums available to small business people. They are complete, comprehensive and easy to use. Through the Yellow Pages, chiropractors can reach a broad range of consumers quickly and effectively without spending too much of their hard-earned money. Simply put, it means that as advertisers, chiropractors can actually quantify the return on Yellow Pages ad dollars.

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