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Q. Is Share of Voice a concept that small business owners need to know?
I have heard that Share of Voice is a marketing concept that is important. Is it something I should spend time on, and if so how do I calculate it?

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A. Marketing expert, Joe Gracia, responds:

There are so many marketing concepts, riddled with marketing jargon, that have been passed down from Madison Avenue, it can make your head spin.

Having spent 17 years in advertising and marketing in the broadcasting profession, I can tell you that most of these concepts have absolutely no bearing on the success or failure of your small business.

Share of Voice is one such concept.

WHAT IS SHARE OF VOICE?

Share of Voice is defined by Madison Avenue types as:

Percent of total category advertising contributed by each brand.

What this means in plain English is, how much money you're spending in the major advertising media compared to how much your competitors are spending.

Let's say, for example, that you are selling a device specifically tailored to Left-Handed Bowlers. And just to keep this simple, let's also say that there is only one way to reach Left-Handed Bowlers, and that is by placing ads in the Left-Handed Bowler's Monthly Gazette.

To determine your Share of Voice, you would have to establish a time-frame. Perhaps you choose to look at your Share of Voice over the past 12 months.

You would then have to gather all 12 past issues of the magazine and make a list of all the companies that have ads in those issues that are selling the same device as you are to Left-Handed Bowlers.

Then you would have to estimate how much each of them spent on their ads during those 12 months in the Left-Handed Bowlers Gazette, and compare those figures with how much you spent.

If you determined that there were two other competing companies and you estimate that Company A spent $10,000 on their ads, Company B spent $20,000 on theirs, and you spent $40,000 on your ads, you can now calculate your Share of Voice as a percentage of the total spent.

Add up all three company's ad costs, which comes to a total of $70,000.

Divide Company A's advertising investment ($10,000) by the total ($70,000) and you get 14.3% Share of Voice.

Divide Company B's advertising investment ($20,000) by the total ($70,000) and you get 28.6% Share of Voice.

Now divide Your Company's advertising investment ($40,000) by the total ($70,000) and you get 57.1% Share of Voice.

THE 'SHARE OF VOICE' CONCEPT IS NEITHER ACCURATE NOR USEFUL FOR SMALL BUSINESSES

And now, after all those calculations, what do you know that can help you grow your business?

Absolutely nothing -- except that you spent a lot more money than your competitors.

There are so many problems with this concept, that there isn't enough room to review all of them here.

Here are just two of the major ones:

  1. You can't possibly know all the various marketing vehicles your competitors are using to reach the same target audience you're trying to reach.

    There are many more than just the highly visible media like newspapers, magazines, radio, TV, billboards, etc.

    How could you determine how much money your competitors are spending on Telemarketing, Direct Mail, E-mail, etc.?

  2. How do you determine the amount and value of Word of Mouth, Publicity and Referrals for you and all of your competitors? You can't.

Most importantly, just comparing how much money you spent compared to how much your competitors spent is not a valid measurement of success. If anything, in many instances, it could represent a measurement of failure -- if you spent yourself right out of business.

SHARE OF VOICE DOESN'T ANSWER THE MOST IMPORTANT QUESTION

What difference does it make who spent the most money on advertising? The most important question is -- how effective is your marketing in achieving your sales goals?

Not all strategies or ads are equally as effective.

One company could have spent a million dollars on ineffective ads that brought them very little results.

Another company could have spend $500 on very effective ads that may have brought them tremendous results.

When it comes to marketing your business effectively, the only measurements you should concern yourself with are your results, from each of your marketing efforts.

For the first three years of our Web site business we didn't spend a penny on paid advertising, so our Share of Voice would have been 0% -- and yet we generated hundreds of thousands of dollars in sales.

The secret? An effective strategy! Not Share of Voice.

MEASURE YOUR SUCCESS BY THE RESULTS YOUR MARKETING STRATEGY AND MARKETING PLAN ACHIEVE FOR YOU EVERY MONTH

Establish a proven-effective marketing strategy and marketing plan for your business that attracts a consistent number of new prospects to your business each month and converts a consistent percentage of them into First-Time customers.

Ensure that your strategy works effectively to generate a consistent and predictable level of back-end, repeat sales from your current customer base.

That's what effective marketing strategies do. If you'd like to learn how to develop a powerful marketing strategy for your business, check out the details of our Give to Get Marketing Solution - now available in both print and digital, downloadable format.

Set goals for how many new prospects you want your marketing strategy to attract each month, and then measure your results against your goals.

The only thing that matters is are you getting immediate and consistent results from your marketing efforts? Are you setting and meeting your monthly prospecting goals, new customer goals, and total monthly sales goals?

There's only so much time available each month to track the effectiveness of your marketing efforts.

Spending that time trying to determine if your competitors are spending more or less money than you are, is a costly activity that you can't afford.



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