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October 31, 2011
Should I renew my Yellow Pages Advertising?

What do I do with Yellow Pages Print and Online ? Renew / Decrease / Cease

I am getting asked this question on a regular basis at the moment. GOOP has many clients that already have or are in the process of dramatically reducing the cost and exposure on Yellow Pages in both directory and Print.

Yellow Pages Online (Australia) is what I consider to be the single greatest mistake a small business can make with their advertising dollars. If you have any queries on this one call me on 03 5222 4220. My best advice here is don't do it

Yellow Pages Print Directory

Yellow Pages, should I renew?If you have a business that runs on low margins you really need to consider the value Yellow Pages may or may not have to offer your business. For example if you sell a product for $50.00 yet you only make $15.00 Gross profit you have a return of 30%

If you were spending $6,000 on Yellow Pages this would mean that you would need to sell $20,000 to recoup your cost at a gross level and you would need to sell another $20,000 just to make a gross margin of $6,000 dollars.

In essence at $50.00 per item you would need 400 new clients to break even and you would need 800 new clients/customers to make $6,000. Is Yellow Pages going to deliver 800 new clients/customers over the year. This calculation is rather simplistic and does not take into account the potential for larger purchases and clients/customers to become regular/repeat visitors.

Do your own surveys of your customer base. You will be amazed how many are repeat customers or direct word of mouth. Will Yellow Pages generate enough new revenue to cover the cost of your advertisement, or are your existing customers helping you to pay your advertising that is unwarranted?

As a smart small business person you need to ask yourself is this is the best method of spending your limited marketing dollars?

Product Price  $50.00
Gross Margin  $15.00
Margin Percentage   30%
   
Yellow Pages Ad Cost (Assumed)  $6,000.00
Margin Per Item   $15.00
Unit Sales Required / New Customers   400
   
Total Sales Required just to break even  $20,000



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