This KPI is useful for ascertaining your advertising budget for retail sales, based on your sales objectives and should not be used to judge advertising effectiveness.
Example:
A) Money Spent on Advertising = R84,201 B) Units sold = 663 C) R Advertising per Unit Sold = R127 (A ÷ B)
Discussion:
This statistic is influenced by many factors, not least of which being the selling skills of your sales team. You could produce a fantastic advertisement that produces lots of enquiries and for one reason or another your sales team fails to convert them into sales.
This result would generate a high advertising spend per unit sold which could lead you to the false conclusion that you are spending too much on advertising