As a business owner, are you spending time and money on advertising and marketing but seeing little result?
Are you advertising in the same publication month after month, wondering if anyone sees it?
Attending networking functions but not getting bookings or sales?
Distributing flyers but not hearing the phone ring?
It’s time to ask yourself what marketing is really all about. Many people define it as ‘getting your name out there’, because people need to know about you to buy from you, right? While that’s definitely true, we believe marketing has a far more important purpose. Marketing is ultimately about getting money in your bank account.
A question we were often asked several years ago is “Should I renew my Yellow Pages advertisement? It’s a lot of money and I’m not sure whether it’s worth it.” These days it’s more like, “I’m spending $1,000 a month on SEO and I’m not sure if it’s working.” Our answer is always a simple question: “How much money have you spent, and how much money has it brought to your business?” Surprisingly, many business owners don’t know the answer.
If you don’t plan your marketing and measure its results, you may as well be rolling the dice. Sometimes it’ll pay off and sometimes it won’t, but why leave it to chance?
Marketing expenditure needs to be assessed against the results it gets. Here’s an example:
A service business spends one hour a week meeting with potential clients for free. This hour could otherwise be billed to an existing client at a rate of $250. One in two of these complimentary meetings results in business worth $1,000. That means for every $500 opportunity cost, $1,000 is gained.
As another example, the owner of a trade business spends two hours per week at a networking function, time which he could otherwise charge out at $300. From this activity, the business gets an average of one new enquiry each week, with a conversion rate of 50% (ie. from two enquiries, on average one person books a service). The average service is $1,000. That means for every $600 spent (two weeks of $300) he earns $1,000.
Now of course we understand that overheads need to be factored in, but this is a good place to start. When doing your calculations, also remember the potential long term business each client can bring (their initial $1,000 service may turn into returning purchases and referrals).
Of course, there are times when you want to try a new marketing tactic, and are not sure how effective it will be. It’s a good idea to start small and low-cost, measuring the success of the campaign as you go. Ensure you maintain a long-term focus (membership of a networking group may take some time to pay off, for instance) but have a date in mind to try a new tactic if you don’t see results. Occasionally you may make no money from your marketing investment, and the only benefit will be that you learned what doesn’t work for your business! For this reason, always ask yourself “am I willing to risk this money if it doesn’t work?”. If the answer is yes, by all means give it a go.
Want to find out the best marketing strategy for your business? We offer eligible businesses a complimentary 90 minute consultation to discuss their marketing needs. Call Julianne Schwenke on (02) 4933 6622 to see if you qualify.