Small business: Advertising - Dominic Sutton, Pumpt Advertising

Dominic Sutton, director of Auckland-based Pumpt Advertising.

Dominic Sutton is a director of Auckland-based Pumpt Advertising.

Can you tell me a bit about your business?

Pumpt Advertising was started in 2003 with my last paycheck. We initially started offering direct mail solutions, but over time the offering has extended further. Essentially now we offer a suite of integrated advertising solutions, mostly for retailers. We have 13 staff.

What is your advertising budget?

We have quite a definite target client - multi-store retailers and franchise groups - and then we have a selection of other clients who, while not our main market, also enjoy our service. In order to reach these people effectively we have to be fairly concise. We would spend about $3,000 per month on promotion on average, across a number of services.

Where do you spend that budget and why have you chosen those particular channels?

Our best results come from a direct approach, which is fairly standard in the business-to-business channel, so that's via our own salespeople, and via direct mail. We also use Google AdWords; vehicle signage, as we have seven cars on the road; and we occasionally put a flyer or advert out via an industry publication.

How do measure the effectiveness of your advertising?

Leads and sales come from an array of sources for us, and it is hard to track everything. We try and follow our own advice and have set up our own formula for success, which is that for any new revenue we are prepared to spend 10 per cent, or 10 cents in the dollar, attracting it. This would vary depending what business you are in, so if it seems high or low to you, it may simply come down to what kind of gross profit you make on any new revenue with an existing business structure.

Lastly, you're in the business of advertising and helping other small business owners make decisions on their advertising spend. What are your three key pieces of advice for getting the most bang for your advertising buck?

1. Always begin with your target. Who are you targeting? Where do they live? What are their demographic characteristics? Only once you've figured that out can you select your media. Many small businesses do it the other way around, so, for example, they like a radio station, so they'll advertise on it, even if that radio station doesn't even appeal to their business' target audience.

2. Define ROI in terms of outcomes, not percentages. A stated outcome in sales value is much better than a percentage response rate. Think of 50,000 flyers being delivered by two companies - one sells pizza, the other sells houses. If you quantify the result as a percentage, there are vast implications versus the outcomes.

3. Be organised, and avoid having too many decision makers. We get a lot of small companies where artwork is vetted by just about everyone in the client's office, most of which weren't involved in the original brief. Set a plan, get in the experts and leave them to it. More changes means more delays, more cost and ultimately missing key events in your promotional calendar.

Coming up in Small Business: Employee share schemes are an increasing trend, particularly in the technology sector. Why and how have some small businesses implemented these? If you've got a good story to tell, drop me a note: nzhsmallbusiness@gmail.com