Hi,

I run a small business doing mostly on-site computer services plus
some adjacent things like web design, web hosting, software
development etc.

I've tried probably all possible and impossible, legal and ?almost?
legal ways to advertise my on-site computer services business. What I
found out is that there is no single advertising method that breaks
even.

Here is an example:
=============
Let us say I pay $500 for and ad or several ads somewhere, like a
newspaper, banner or anything. Then I charge $50 per hour of my
service and an average client usually requires 2 hours of my work. So
based on these numbers in order for my ad to "dirty" break even I need
it to generate 5 sales. Assuming my time had no value and I work for
free just to pay off the cost of the ad, 5 sales x 2 hours each x $50
per hour = $500 which I invested in the ad.

The real situation is even worse. Because I am in business, it is not
enough to just ?dirty break even? working for free to just pay off for
the ad cost. So if we assume that advertising budget is 25% and my
time costs the rest, which is 75% of the retail price of $50 per hour,
then my time after the expense on the advertising would be paid $40
per hour net.

Then to really break even to get paid my $40 per hour, my $500 ad
should generate 25 sales for 2 hours each. (25 sales x 2 hr each x $50
per hour = $2500 = 25 Sales x 2hrs each x $40 per hr + $500
advertising cost)
===============

So based on my example, to theoretically break even, an ad of $500
should generate 5 sales or to break even in real life the very same ad
should generate 25 sales. Well, in reality may be less than 25 because
some customers will return back again, but let us count only the first
round without that residual component. Also let us not talk about
exploiting my existing client?s database. I am talking only about the
new clients now.

My experience tells me that there is ALMOST no way to spend $500 on
advertising of on-site computer services getting 5 sales. And there is
ABSOLUTELY no way to spend $500 on advertising getting 25 sales.


CAN ANYONE PROVE ME WRONG?


* * *

I can prove you are wrong by example.  If advertizing costs more than
it produces they why does anyone advertize?

What would happen if you didn't advertize?  Some businesses do very
well by word of mouth.  But most businesses who don't advertize never
make it.

I think the trick is to find the right kind of advertising plan.  One
that most efficiently targets the greatest number of potential buyers.

Easier said than done.  Good Luck.

While all your addition and multiplication seems to be in order, you
have made some fundamental errors in the calculations you have used. 
First of all, you have assumed that each customer will only chose to
use your services once, and only once.  If, on that visit you should
prove of good perceived value, you would conceivable be called again?
no?  So first we must call them visits.  Let?s assume your call back
rate is on a descending scale of 50/75/25 (50% of your clients call
back, of those 75% call back for a third visit, and of those 25% call
back for a fourth visit).  Thos ?5 customers? would result in an
additional 4.8 visits.  For posterity sake, we will call it 4, total
visits 9.

No enter ?marketing?.  While some people would say adv. & marketing
are the same thing, you should realize that advertising is just a part
of marketing.  Other parts would include, making your customers aware
of the TOTAL services you provide (does your website/business
card/invoice have a short list of the services you offer?)  You have
mentioned word of mouth, but are you using the words of your mouth?
?Well, I?ve fixed your problem, but I noticed you are using a low
speed network router with your high-speed ISP, your paying top dollar
for the high-speed, but not using any of it (not even sure if this is
possible, just an example).

These are just some brief comments on your question? hope it helps to
put it all in perspective for you.