Wednesday, June 29, 2016

The math of O4BO and Explorer 4

In a recent conversation with one of our subscribers we discussed the math of things like reach and engagements.

For some reason I had never considered these numbers until that conversation.  It wasn't that I didn't know the numbers, I just didn't think and talk about them in this way.  Here is the conversation we had.

M: is Me
P: is the subscriber

Picking up the conversation in the middle...

P: I am considering printing a brochure and paying someone to hand them out.
M: Yes that may be valid, especially in high traffic areas nearby.  I have read the effectiveness of that and I think it is quite low.  Perhaps our model is better.
P: You mean our subscription to Explorer4manila.com ?
M: Yes.  So let's say you print a good brochure in color that shows where you are and some of your menu items.  Let's say you give out 1,000 of those in Makati, how many of those would visit your restaurant?
P: I don't know, maybe 5 or 10.
M: Ok how much would each of those buy in one visit?
P: Well they would likely not come alone so they might spend P1,000
M: Great so those 1,000 brochures given out in Makati might give you P5,000 to P10,000 right?
P: Yes
M:  So how much would that cost you?  To Print and pay someone to hand them out?
P: I don't know, maybe P2,000 to P3,000
M:  Ok so if your estimate of 5 or 10 visits as a result seems profitable.  What if it is 1 or 2?  What if the costs is P4,000, then not so profitable?
P: True
M: Ok you are on a P1,000 subscription to explorer4manila.com right?
P: Yes
M: Recently we did an ad that was a Facebook post we boosted in the Manila, NCR region. Here is a screen shot on my Facebook pages screen for that ad...

M: This ad cost P360 and it reached 2,639 people and 474 clicked through to your site. We did all the work for you, we created the page with your images and did the boost all as part of your subscription, we created the ad post and we collected the names and email addresses of those that clicked through and added them to your mailing list.
P: Yes, ok.  I get it, my money is better spent all it would take is 1 person coming to visit to make a profit and only my cost is P1,000/mo.
M:  The more you spend with us the more exposure you get, 10% of your subscription fee goes to Social media boost ads.

Pretty good math compared to printed brochure handouts, yes?