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The True Value of Think Local

Steve Indersmith

Lets explore the true value of Think Local and turning Locals in to Loyals

Here is  what a client's dashboard looked like following their July activity:

Sales Value Emails Phone Calls Website Referrals Views
3 $495 1 4 30 400


In this example the client has sold 3 deals for a total value of $495. The cost of their advertising was $165 so their ROA (Return on Advertising) is 300%, RIGHT? Well yes if I take a short-term, simplistic view and NO if I look deeper to see the true value of the business's results.

Think Local is all about creating LOYAL customers so lets explore the value in that and the likely true return. For this exercise, you can relate it to your business.

The Numbers
Emails & Phone Calls – HOT leads

We know about 3 sales so lets lock that in. Next lets consider the email and phone calls, 5 in total.

I think it is fair to say that if someone has emailed or clicked to get your business's phone number, they are a pretty hot lead! In fact, it is reasonable to expect that some of those people will purchase now or tomorrow but they will purchase. So pick a conversion rate that suits your experience. I’m going to pick 20%. 20% of 5 hot leads is one more sale – lock that one in.

Website referrals – WARM leads

OK, so your prospective customer has decided that they need more information on your business! They are now on your website exploring, they are engaged and actively seeking information on your business that will allow them to make a purchasing decision. They are a WARM lead.

It is very reasonable to say that some of these WARM leads will arrive at your door step. Pick a number, I am going to say 10% or 1 in 10. That’s 30 website visits or 3 more sales – lock it in!

Views – WARMish leads

So views are locals clicking on the various promotions and events that you have up on Think Local. They are exploring your business, you have got their attention and they are browsing with intent. Maybe they are not as strong a prospect as those that went on to visit your website but then again maybe everything they needed was on Think Local.

Point is they are WARMISH and now that your business has become VISIBLE some will turn in to customers. Pick a number I’m going to say 2%, that’s 8 more sales – lets lock it in!

The ROA So Far
Lets see where we are at:

  • 3 sales worth $495
  • 1 expected sale from email and phone enquiries
  • 3 expected sales from visits to your website
  • 8 expected sales from browsers on Think Local

So the sum of what we know and what we expect to get in the near term, using very conservative estimates, is 15. That’s 15 sales from an investment of $165!

So that’s the true value right? Wrong, lets go one step further.

The True value of Think Local
It’s all about the LOYALs, the sale is great but it’s not where the value is.

Lets consider what a LOYAL valued client is worth to the business? I’m sure you have thought about it. What is a typical purchase from one of your better clients? $100, $200, $400? How often do they return; every 4 weeks, 6 weeks, 3 months?

For the sake of this exercise lets assume your Loyal client spends $160 a visit and returns every 8 weeks. In one year that means they spend 6 x $160 or $960. So one LOYAL client is worth $960 a year, you do your numbers.

The last question is how many new clients do I need to get to generate one LOYAL client. You know the answer for your business, I’m going to say 5. For every 5 new clients I turn one into a LOYAL LOCAL worth $960 a year.
-Now we know we generate 15 actual or expected sales which results in 3 LOYAL LOCALS
-Three loyal locals are worth $2880 per year
-Our investment for ONE month in Think Local was $165
-Therefore, our ROA is ($2880/$165) 1,745%. We generated in one year 17 times what we spent in one month!

Finally, lets draw the conclusion on the business at the top of this article. We worked with them to explore the real value of their July activity and one of those 3 initial purchases went on to purchase a $5,000 membership for the year! That's their Think Local advertising covered for the next 2.75 years. Now that’s the true value of Think Local...

For more information about Think Local, click here to view a full overview, email or call 9905 6011.

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