Cost-per-contact efficiency pays off - advertising sales in the magazine industry

Folio: The Magazine for Magazine Management, May 1, 1993 by Helen Berman

Tell prospects that, with a 35,000 circulation, your magazine has 35,000 'mini-salespeople' in the field selling their products.

In these increasingly competitive times, to exclude magazine advertising or to invest insufficiently in it is the equivalent of marketing suicide for your clients and prospects. Magazine advertising buttresses and enhances every other sales communication tool your clients and prospects may use. And magazine advertising is a fundamental investment, given magazines' relative reach into their markets, and the relative cost-per-contact that magazines offer compared to other marketing tools.

The problem is, your clients and prospects may not know all this. But you can bring this important information into focus for them by helping them analyze the relative market reach and cost-per-contact of each of their different sales tools. And by doing this, you will be in a stronger position to fight for a greater share of their total marketing budgets.

Clarify for your clients that each of the various sales methods they may be considering performs a different sales function. Salespeople, trade and consumer shows, telemarketing, direct mail and magazine advertising each reach and influence your clients' customers and prospects in different ways. Each sales tool also requires a different level of investment in terms of your clients' staff time and money. And each will do a better job if magazine advertising is used as the base.

Let's look at some of your clients' marketing tools in terms of their market reach and cost-per-contact.

Salespeople: Despite all the advantages that salespeople offer, they are an expensive investment. Sitting at the top of the marketing chart shown here, your client's field sales force represents the most expensive cost-per-contact: $248.

You need to remind your clients that, aside from salary and commissions, salespeople are also incur other costs: payroll tax, medical benefits, travel and entertainment, secretarial time, office space, and so on. Consequently, your client will want to focus his salespeople's energies on their best prospects and customers. But no matter how skillful a salesperson is, he can be in only one place at a time, which limits the number of prospects he can reach.

Magazine advertising, on the other hand, has a low cost-per-contact--an average of 15 cents--and reaches everyone in the market simultaneously. If your magazine has a circulation of 35,000, you might suggest that your client view your magazine as having 35,000 "mini-salespeople" out in the field.

To a cost-conscious ad prospect, magazine advertising's ability to help lower expenses--and therefore increase profits--can be very appealing. According to Cahners Advertising Research, an average sale for a typical business magazine advertiser takes 4.49 sales calls to close (CARR #542.5B). Based on the average cost of a personal sales call the average cost to close a sale is $1,163. Whatever the marketer can do to speed up the sales process will lower the cost of each sale. And magazine advertising is an excellent way to pre-sell the product, open the door for salespeople, and thus accelerate the closing. Point out to your client how advertising in a magazine such as yours will increase the impact of his sales force for a relatively small incremental investment.

Trade and consumer shows: In business-to-business marketing and in many consumer markets, expositions and shows play a critical role in landing sales for your clients. Although the number of prospects an exhibitor can see during the day at a show is much greater than in the field, any exhibitor will tell you that shows are expensive. Booth cost is a small percentage of the overall cost to your clients once they add in shipping, setup charges, travel and entertainment--along with the investment in management, technical personnel and salespeople's time.

The cost of exhibiting is so great, in fact, that despite the strengths of a show, some industry marketers are reluctant to make the investment. Some are particularly nervous about sacrificing valuable field sales time by bringing salespeople to a show. Nevertheless, the average per-contact cost at a show is less than the cost of a field sales call.

You want to remind your client that magazine advertising is considerably less expensive than exhibiting at a show, and also hassle-free. Furthermore, magazine advertising will help the show and field salespeople to sell more effectively.

Telemarketing: Compared to field selling, phone sales efforts significantly increase the number of sales contacts per day, thereby decreasing the cost-per-contact. In addition, in most industries, telephone salespeople are generally compensated at lower levels, as compared to field salespeople. The marketer also saves money on expensive field sales items such as travel and entertainment costs. According to the American Business Press, the average cost-per-contact of telemarketing is $23.25, significantly less than field sales or expositions. But magazine advertising is even less expensive--and again helps the telephone salesperson by pre-selling his or her prospect.