Driving School Advertising Basics – Part Two

All businesses, driving schools included, must advertise to receive business, and the problems with advertising are always the same: (1) Which advertising is the best for driving schools? (2) What should my advertising budget be? In this series of articles, we will answer these questions in sequence. When you are done, you will know the basics of driving school advertising. (For “Part One – Choosing The Best Driving School Advertising” – click here.)

Part Two – Determining Your Driving School Advertising Budget

Getting your driving school advertising budget right will forever be a work in progress; however, if you stick to these principles, you are likely to turn a profit on your advertising and not overspend. As many driving school owners know, one tricky part of the business is pure cash management, because you are paid for services in advance of providing them. That means your bank account can sometimes look much bigger than it is. Getting control of your advertising budget will help you create predictable revenue for your business.

So let’s get to it!

1. Focus on Return-On-Investment (ROI).

When it comes to advertising the single, most important goal is to find a return-on-investment in your advertising. Return-On-Investment is a straightforward business concept: You want to profit from your investment. If you don’t your ROI is bad. If you do, it is good and could maybe be better.

2. Find Your Magic Number.

Spending more or less money is simply a measure of determining how much business you want or don’t want once you find your “magic number”.

Sure, it gets a bit more complicated than that, but fundamentally, you want to know that if you spend $1 on advertising, you are earning more than $1 back. That also means before determining your budget, you should always ask your advertising provider how they will demonstrate to you that you are earning money from your investment.

You may try out Internet marketing or school uniform sponsorships and learn that for every $100 you spend, you are making $300 in new student bookings. From there you may do additional work to optimize your advertising so that maybe you can spend $75 to get the same result.

The most important part is that you’ve found that, more often than not, if you spend $100 a certain way, you will make a profit for your business.

3. Determine Your Marketing Mix.

Another rule of thumb is that you want to try different forms of advertising. We call this your “marketing mix”, which refers to the mixture of different approaches you take to your advertising. By testing different approaches, you will find what works and refine your budget. Over time, you will get better at advertising and make more money.

Generally, it is significantly easier to measure the effectiveness of Internet advertising than traditional advertising, because you can track all of the activities a new driving school student takes. This includes whether they visited your website, contacted you by email, or even picked up the phone to call you. By tracking this information you can learn exactly how much money you are making (or losing) from your advertising!

Now let’s look at an example – in one year, here is one way you might break down your budget:

James plans to split his advertising budget between ONLINE advertising and OFFLINE advertising. That means 50% will be spent in one area and 50% will be spent in the other.

Online advertising:

35% of my budget will be spent on my website and and showing up on Google.

15% of my budget will be spent on Facebook ads.

Offline advertising:

20% of my budget will be spent on coupons run in local flyers.

15% of my budget will be spent on local, branded sponsorships (i.e. kids’ sports team snacks and uniforms)

15% of my budget will be spent on branded signs for my cars.

Altogether, that totals 100% of my budget.

In this example, James has determined his marketing mix and has a goal for how to spend his budget.

4. Commit Revenue To Your Budget.

Finally, once you have these other principles in mind, the last and equally important one is to make sure you are spending on advertising. Of course this may sound obvious, but it’s really not.

When it’s the middle of winter, and you’re sure that business is going to be slow, should you turn off all advertising? Of course not!

You spent all that time figuring out what advertising works for you, and you need to stick to it. You might decrease your budget slightly, but you shouldn’t stop advertising altogether.

If you do not advertise in the winter, then your spring revenue will be smaller! This is why it is important to commit revenue to advertising. If you do not, you could be sacrificing significant future profits.

5. Experiment With Your Budget.

Experimenting with your budget is the only way you can learn exactly how much money to dedicated to advertising. Driving schools of different ages, locations, and sizes will have different marketing budgets. If you are in a city with a ton of competition from other driving schools, your advertising budget may very well be bigger and more complicated than another well-established driving school that serves a single suburban community.

For this reason, you need to experiment with your budget to see how different forms of advertising perform.

Whether you want to spend $100 or $1000 dollars per month on your driving school advertising, as long as you stick to the rules described above, you should turn a profit. And, yes, we love adding more safe drivers to the road, but really – your driving school business is just that – a business! So let’s make money!

Related Article: 7 Ways Driving Instructors Can Advertise Their Business

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Josh Meah

Josh is the CEO of DrivingSchool.Marketing. His goal is to be the marketing and business development partner of driving schools around the world, helping them become thriving businesses while also expanding general awareness for the importance of traffic safety standards and education.

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