Why Traditional Advertising Doesn't Work and How You Can Increase Your Profits

There are only 3 proven ways for a business to increase revenue:

-attract new customers

-increase visits by existing customers

-upselling or getting your existing customers to spend more

Traditional advertising, which utilizes image or brand building ads, is ineffective at accomplishing these goals for small independent businesses. These are only effective if you have the large multimillion dollar advertising budget necessary to ensure the repetitive showing of your advertisement in high exposure slots. Your average independent business will see little to no increase in their revenue from the image or brand building advertisements that they can afford to do.

Independent businesses need to focus their energy on the most cost effective methods of increasing their revenue. Your attention should be on the 5% of your customer base which can be responsible for up to 50% of your revenue, especially during this downturn in the economy where you need to get the most bang for your buck. By getting this group of your existing customers to come back more often, you’ll see an immediate increase in your profits. Attracting new customers can be up to seven times more expensive and time consuming than increasing business from your existing customers. Thus, independent businesses must find inexpensive but effective ways of accomplishing this goal.

The Travel and Dining Association (TaDa), a national association for independent restaurants has put together a comprehensive program to help their members pull this off. TaDa has several programs that work to not only increase visits by existing customers but also attract new customers, such as their Travel Thru Dining Sweepstakes that offers customers of their members the chance to win a trip to anywhere in the world valued at $25,000. They also have a Restaurant Ambassador program where high school students are rewarded with a free trip and computer upon graduation which harnesses the power of community goodwill and puts it to work for your restaurant.

Every independent restaurant that joins TaDa receives their own customizable webpage which is one of the most effective yet inexpensive ways for a restaurant to find new customers. TaDa members are also able to put the power of word-of-mouth advertising to work for them thru a review and comment section on their webpage. Each month TaDa members are emailed professionally prepared press releases that they can distribute to their local media outlets. The press coverage these independent restaurants receive is essentially free advertising.

Loyalty and Gift certificate programs are also excellent methods of increasing visits by existing customers. Gift card balances decline as the card is used which helps to encourage repeat visits and limits the amount of cash refunds given. They are also an excellent way of increasing brand awareness. Loyalty programs work by giving the customer a reward for having spent a certain amount of money at that business. For example, customers would receive a $10 gift certificate for every $100 they spend at a business. Independent restaurants that join TaDa have the option of putting loyalty and gift certificate programs to work for them.

Any business can learn from the programs TaDa has created to help independent restaurants increase their revenue and adapt them to their individual situation. Small Business owners have to stop spending money on advertisements that make them look good but don’t actually accomplish their objectives. Instead, they need to focus on ensuring that they get the biggest return on their investment by putting their advertising dollars to work in the places and ways where it will have the biggest impact.

About the Author:

Miss Bayfield is one of the founders of the Travel and Dining Association (TaDa) an association dedicated to providing independent restaurants with the tools they need to compete.