Small Business: Advertising – Jeremy Wyn-Harris, Builderscrack.co.nz
Jeremy Wyn-Harris, co-founder of Builderscrack.co.nz.
As a background, can you tell me a bit about Builderscrack.co.nz?
Builderscrack.co.nz allows owners to post a job posting with their requirements and interested craftsmen to pursue them. Among traders who show interest, owners can look at their reviews, references and backgrounds and use that information to pre-screen up to four traders who come to visit the site. Merchants can then offer quotes online, which owners can compare. The tradespeople are then reviewed by the owner, providing completely genuine feedback to other owners.
The idea behind Builderscrack.co.nz came to Mark Dickson and his wife Shona in 2006 after having had a frustrating experience trying to find a reliable craftsman. Mark and Shona brought up the idea to a friend who then introduced them to me, as I had worked with tech startups before. Keith Roberts, who has a background in business, also joined the group later that year, and in February 2007 the first version of the site went live.
Builderscrack.co.nz now has a team of around 10 people, half of them full time and the rest part time or contractors. We have an office here in Christchurch – in one of the last old brick buildings in the city! – and staff in Auckland.
How much do you spend on advertising and how did you arrive at that number?
We spend about a fifth of our income on advertising. We track the effectiveness and incremental returns of advertising through each channel, tracking where customers hear about us when they sign up and which sites they’ve visited before ours. Google Analytics has tools that help us track the most effective referral sources. We also use Google Analytics to monitor the cost and returns of auctions on AdWords in each area, and adjust our budget accordingly.
Where do you spend your advertising money? Why did you choose these channels in particular?
Our most effective advertising isn’t really advertising – it’s customer word of mouth. Customer referrals are our most important and effective source of new customers. So our main goal is to give customers a great experience, and we know that they then tell their friends about it.
Of our spending on advertising media, we spend the largest proportion on Google AdWords. Over time, we have tested radio, print media, billboards, and other forms of online advertising like banner ads and Facebook. Radio works well in terms of building brand awareness, but getting people to move from the offline world to the online world is not very effective. For us, as an online service, it is more efficient to let customers know about us when they are already online. We manage our AdWords campaigns to make sure we receive positive feedback, and Google Analytics is a powerful tool to ensure that we can continually improve in this area.
At the start of Facebook, it was producing very good results. However, as more and more advertisers started to use Facebook, the costs increased, the competition for attention increased, and the return on investment of this channel decreased significantly. When people use Facebook, they probably aren’t using it to find a quality builder. When someone goes to Google and types “builder for my extension” then they’re motivated to find a good builder, and that’s where we can help you, of course.
What kind of return have you seen from your advertising investment and how do you calculate that?
We manage our advertising to ensure we receive positive feedback on campaigns throughout the lifespan of acquired customers. We know what different types of customers are worth to us and we use this to ensure that our advertising campaigns generate positive feedback. If they don’t, we don’t run them for long. We’re happy to put small amounts of money to work to try out different ideas and then invest more behind the ones that work well.
Finally, what advice would you give to other small business owners when it comes to advertising?
Spend small amounts of money on testing ideas, then invest more money in those ideas that work. The right mix will depend on your business, where you are at, who your customers are, and what your goals are. Some businesses are well suited to offline advertising and others to online advertising. It is also very easy to spend a lot of money on advertising with little effect, so careful experimentation with all forms of advertising is essential to determine what works for you and what does not.
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