The most important 3% of your budget

Marketing, real marketing, is the single most important part of your budget in a game store. I’m not talking “oops I ran that event below cost let’s write it off as marketing” screw ups, I’m talking about genuine “get people in your door and excited” marketing.

If you read around the game industry, and retail in general, you’ll find conventional wisdom is that your marketing budget should be 2-5% of your gross, sometimes more if you’re new, sometimes less if you’re riding on past investments. Recently I spoke to a colleague who had recently bought a game store and was looking for advise on marketing. Here are the notes I prepared for our conversation, may you find them useful. Note that this isn’t a marketing plan. These are components one might include in a marketing plan, highly editorialized based on my experience managing stores in two mid-sized metros. Ideally, you’d write a business plan that includes a detail of how you will spend your marketing dollars.

How much to spend

  • Know your gross, and have a budget. Let’s say your game store makes $20,000 a month, and you want to spend 3% of that on marketing. That’s $600 per month you can spend on marketing. If you’re a new store, you should have sales projections. Take at least 3% of those, put it in a bank account, and spend it each month.
  • Seriously, spend all of it.
  • Marketing, in the sense I’m talking means “money spent to get people in your door.” It doesn’t mean “money lost running an event at or below cost” – that’s a kind of marketing, and should be part of this budget, but it serves existing customers more than new ones, and you still have to spend money to tell people the event exists.
  • Spend your whole budget, every month. If you don’t spend some of it one month, plan a big marketing push the next month. Use it up. If you’re running your business well elsewhere, this money should be there to get people to come to your business.

How and where to spend

  • Social media. Targeted Facebook ads, specifically, have the highest ROI of anything I’ve tried. We spend $2-$500 / month on Facebook marketing alone, and we are a Neighborhood store uninterested in regional draws. I could easily see spending double this budget.
  • Have your Facebook cross post to Twitter. There are, believe it or not, still a few real people on Twitter, and this just costs time.
  • Google advertising. There are two approaches to this: the first one is to spend a barrel of cash on Google ads. ~$200 is the chunk of our budget we use when doing this. The second approach is to optimize your website for the keywords you want people to find you with in the region you want to be in. That probably means spending a lot of time or money on web design. Ideally, you do both, but the point is the same: grab people searching for “Game store” or “Game X” + “Your City Name” and redirect them to your business.
  • Ad services such as “Gamerati” that target ads on websites your core customers visit (assuming your core customer is “gamers” anyway. It might not be, depending on your business model).
  • Outreach. Run events at your town center. Your library. Your local conventions. I do not mean go there to sell things. I mean go there to make new customers. Run a demo and give a great gaming experience, then give the people who play a little something to check out your store. A free entry to D&D. A free entry to FNM. Not a coupon, not a discount, not store credit. A free experience, like the one they just had, but only if they come participate. Pay staff to do this if you’re not good at it. Train them to run a demo first though.
  • Memberships: Have a membership program and some kind of rewards system. It’ll increase your customer retention exponentially. Get their email and zip code when they sign up. Your POS can do 95% of this for you.
  • Newsletters. One of the time’s I bought out a closing competitor’s stock I said “I’ll pay you 10% more for your email list” and he replied he didn’t have one. Email lists of up to 2000 people can be sent for free with MailChimp or a similar service. There’s no reason not to be collecting emails when people sign up for your membership program. You have a membership program, right? Right?
  • Swag. Dice bags, pint glasses, t-shirts, membership cards with your logo. Anything that puts your name in your customer’s house. This is branding, and it’s generally a “big business” strategy, but depending on your region this can help retain existing customers.
  • Big scale community events. What kind of event puts your gaming community in front of your neighbors in a positive light? Maybe it’s a BBQ or a movie night or a hike to catch Pokemon. Whatever it is will be highly dependent on your region and customers, so you can’t do this without a well-developed customer base. Research it, plan it, and when you do it market it with the methods above.

Who to market to

  • So few people consider this, don’t be that store owner just flinging sales and discounts around. If your only marketing tool is discounting, you’re going to get only one kind of customer.
  • Decide who you want to be your customers. Write profiles for them. How much do they make? How old are they? Do they have kids? Where do they live? How far do they travel to get to you? How big is their friend group? Introverts or extroverts?
  • Decide who you don’t want to be your customer. Make profiles for them. Avoid marketing to them by mistake. No, this doesn’t mean be a racial profiler, it means if you’re planning a high end boutique game store that will cost hundreds to patronize regularly, you can’t market to college students without stead incomes.
  • Once you have some customers, put yourself in their shoes and try to imagine the kind of experience they’d want to have shopping. It will not be the Android’s Dungeon from the Simpson’s. If it is, try again.
  • Create your ad to present the experience you just imagined to the person you just imagined.
  • Do it again, every single time you create an advertisement.

Traditional Marketing (e.g. Newspaper and TV)

  • Don’t.
  • Seriously, newspaper and TV ads reach a shrinking demographic. An ad on Google keyed to the term “Netflix” targeting your region will get you more ROI. If you’re in a small town, or a place with a small audience that you will reach 90% of with such an ad for minimal expense, go for it. In general, these ads will cost $2-$4000 to run in a prime time slot in a large urban center. That’s 3-6x the advertising budget for a month. Yes, you will get a response, but on average we have seen 1 customer for every $20 spent this way, vs 1 customer for every $2-3 spent other ways. This is something to do if you are 1) running your game store on a trust fund 2) desire to not make a profit this year 3) are building a new business and want to have some sort of “shock and awe” marketing to take your local community by storm.
  • There are exceptions. You’re probably not one.

What’s the point of all this spending?

  • Growth, dummy. You want more customers right? You want them to buy things in your store and play games there right? You need a way to tell them you’re there, and what you’re doing.

Marketing is something I see maybe 10% of game stores actually doing based on any kind of plan. Paid ads? Hardly anyone (though this number has gone up a lot in the last 3 years). Doing any marketing that isn’t on Facebook? Well, actually, I get this one, as dollar for dollar Facebook is the most effective, but a store should do more. Creating customers representative of demographics? I genuinely think I can count on one hand the stores I know for a fact that are doing this in the country. You don’t have to do all of these, or only these, but you will need to do some of these or you won’t survive long.

Besides, you don’t want to survive. You want to thrive.

Don’t you?