Marketing Matters
What's your yield per acre?
By Murray Raphel

Farmers measure their productivity by yield per acre. They'll talk about getting a yield of so many bushels of corn, cabbage, or beans per acre. If the average for the state is 100 bushels per acre, the farmer getting 60 bushels per acre knows he's doing something wrong. Eyecare professionals can measure their "yield" within an existing market area. The "acreage" is the amount of potential available business within an area that could be serviced by your location.

Define your primary market. This is where 80 percent of your customers live. List the addresses of 300 of your current customers. That sample will tell you where most of your customers live. If you're like most small businesses, you'll find out that about eight out of 10 of your customers live within a three- to five-mile radius from your business.

Find out how many family units live in your market area. Your local post office will give you this information. The postmaster knows how many carriers cover the area and how many homes each carrier delivers. Example: There are 5,000 homes within three miles of your store and about three people live in the average household. That's 15,000 people in your market area. If you take care of 1,500 customers in that three mile radius, that's 10 percent of your available market.

Your yield per acre can be impacted by a number of market factors:

1. Geographical boundaries.

2. Density of the market.

3. Income level.

4. Types of work local people perform.

5. The social lifestyle.

6. The ethnic characteristics.

7. The median age level.

8. The weather.

9. The amount of competition.

10. The nature of the competition.

11. The nature of your own competitive activities.

The combination of these factors determines why one business does $20,000 per week in sales and another similar business in the same town struggles to do $2,000. But whatever factors you have to contend with, you can always improve your business yield.

It is true that you have to live with some unchangeable elements. Consider them as givens. You can't change the economy of your area, or the density, or the geographical boundaries. It may be difficult to change your location, and you can't change how your competitor promotes or charges for his business. But you can do a lot about making your own business more successful. Do nothing and you can bank on it--nothing will change, except the external factors that influence any business.

Take an eyecare dispensary, for example. The range of annual sales for a stand-alone storefront can run from a low of under $100,000 to a high of $1,500,000 or more. But you can increase your yield, whatever it is, by 20 percent, 50 percent, or even more. You can do this by understanding your market and taking action.

You do an analysis of your market area and know there's an expressway to the north. No sales come into a business from the other side of that barrier. There are railroad tracks to the south. Very little comes from the south of the tracks. There's a golf course to the west. Nothing much west of that point, and to the east there seems to be a boundary at Fairview Avenue. If this was your business, located on Main Street right in the center of town, you'd limit your promotions to within those boundaries. Your goal is to find out how you can improve your yield per acre. There are two ways to do this: Increase the number of customers who do business with you or have the customers who do business with you spend more with you. Various techniques can also improve your yield per acre. These include:

Branding. Create an identity for your business. Let customers know what is special about your business.

Loyalty programs. Your best source of business is your current customers. Get them to come back and spend more.

Direct mail. Dollar for dollar, direct mail returns more profit to your business than any other form of advertising.

Newspaper advertising. Three out of four people will read the headline of your ad, but only one out of four will keep reading--unless your headline inspires them to continue.

Mass media. Use radio and TV to increase business.

Today, we want you to focus on measuring your market. When you know your percentage of the market, you can increase your share. Even if you have every customer in your market, you can still dramatically increase your sales by motivating your regular customers to spend more. Once you're used to viewing your market the way a farmer views a crop, you'll figure out how to increase your yield--and profits.

Raphel Marketing, a marketing and publishing firm that specializes in helping small-to-medium sized businesses do more business through better marketing techniques. You can contact the firm at info@raphel.com