The question that's never been answered ...
Around 2006, I discovered the world of direct response marketing via Dan Kennedy. Mr. Kennedy is a world-renowned marketer who insists you measure your marketing and advertising efforts ... directly to dollars in your bank account, without exception!
One of Kennedy's fundamentals is knowing the "numbers" of your business. These numbers won't be found in a balance sheet or income statement. The figures come from the world of direct response marketing. These "numbers" are also terrifying to most ad agencies and advertising sales executives.
What are these "numbers"? They are the critical marketing math numbers of a business or event. And knowing your marketing math numbers can give you massive leverage in your media buys!
Let's start with ATV ...
One of Kennedy's "numbers" is ATV or Average Transaction Value. In its simplest form, ATV is the average purchase amount for a transaction over time. And the time constraint can vary.
In the case of events, what's the average value for a customer transaction (regardless of the total number of tickets purchased) in 2018?
Back in 2006, I started to ask clients and event organizers if they knew their ATV. It's also one of the most important questions I ask during expensive event marketing audits.
After asking the question around 100 times over the last 12 years, not a single event organizer could answer the question. Not even the MBAs or accountants who were Board Members for various events.
When I would ask the ATV question, people would get confused, "what's that?" Or reply with, "why does it matter?" And some people would get annoyed that I even asked the question.
Because your ATV has a massive impact on your marketing and advertising efforts. ATV can show you how much you can afford to spend to acquire a new customer or re-engage a previous customer.
Here's one of the big reasons advertising sales executives hate me ...
In 2013, a client was considering a local media buy for their event. The media buy included both traditional and online placements. At the time, I knew that the client's Average Transaction Value was around $50 USD.
With some additional marketing math numbers and based on the proposed marketing package, I calculated that it would cost my client over $400 USD to generate a $50 USD customer transaction. My question for the ad sales executive, "why should my client pay $400 in advertising to generate a $50 sale?" That math doesn't work!
Good news ... it didn't require my client to purchase advertising, "just to find out what happens." Because they knew their numbers!
Make sure you take advantage of Dan Kennedy's marketing math numbers!
You can get started with finding your Average Transaction Value. Please make sure you look up ATV and have it committed to memory. At a minimum for your last 3 to 5 events.
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