SALES FUNNEL EXERCISE (See spreadsheet)

A local eye doctor, Dr. Corneal, is interested in expanding her business. The retail store next to her medical office is available for rent. Shed like to expand and open a larger frame selection including high-end sunglasses. Shes already built an attractive website and now she is planning on advertising to increase her business. Her advertising options include:

Google Paid Display Ads

Local Newspaper Advertising

Local Magazine Advertising

Radio Advertising

For each form of advertising, she has created a separate landing page to track site visitors generated from each ad.

For this assignment, you are going to fill in the excel chart, using Chapter 13 as a guide and then answer the questions below. To start you off, Dr. Corneal is providing you with her definitions of Prospects, Leads, Opportunities, Customers.

Definitions:

Prospect Anyone who lives within 15 miles of Dr. Corneals medical practice.

Lead Anyone who lives within 15 miles (a prospect) who wears glasses or is interested in fashion sunglass frames.

Opportunity Anyone who lives within 15 miles (a prospect) who wears glasses or is interested in fashion sunglass frames (a lead) and responds to a call to action.

Call to Action the ads include a call to action that lead potential customers to a landing page offering 20% off on the first exam.

Customer people who purchase as a result of the promotion.

Questions:

1. Using the assumptions provided in Excel Spreadsheet, what is the total number of customers generated from this advertising?

2. If Dr. Corneals customers spend $300 on average, what is the total revenue generated from this advertising?

3. The cost to purchase the advertising is as follows:

Google Ads: $5,000

Newspapers: $3,000

Magazines: $6,000

Radio: $1,000

Using these costs and the revenue generated from each ad source, calculate the overall ROI and the ROI per advertising source. How do these number help you plan your advertising budget going forward? To answer this question, define ROI, explain how ROI is used (see your book), apply the numbers you have calculated and show how you would use these numbers for planning purposes.

Note - ROI is expressed as a percent. ROI= (Revenue - Costs)/Costs

Dr. Corneal's Projected Sales Funnel

Dr. Corneal's Projected Sales Funnel

Dr. Corneal's Projected Sales Funnel

Dr. Corneal's Projected Sales Funnel

Dr. Corneal's Projected Sales Funnel

Dr. Corneal's Projected Sales Funnel

Google

Newspapers

Magazines

Radio

Prospects (5000)

4,500

3,000

Leads Level A

Wears Glasses

3,375

1,875

Leads Level B

Fashion Sunglasses

250

100

Total Leads Level A+B

2,550

Opportunities

191

10

Customers

5

Total Customers

Assumptions:

5,000 people live within 15 miles of Dr. Corneal's store

90% use Google regularly, 50% read newspaper, 60% read magazines, 20% listen to radio

Based on medical data,on average 75% of the population needs glasses

Radio listeners are older, have more eye issues, 90% need glasses

10% of people don't need glasses but like fashion sunglasses

Average Call To Action Response Rates

Google

5%

Newspapers

2%

Magazines

3%

Radio

1%

Average conversion rate from Opportunity to Customer - 50%