Make Marketing an Investment not an Expense.
When I ask most business owners “What are the results of your marketing?” they invariably reply that either it is OK or it does not work.
When I ask “In what way is it OK or it does not work?” there is usually silence while they start thinking about it!
I then ask: “How do you test and measure the results?”
Most of them reply: “Test and measure the results? What do you mean?”
I find the majority will never have done that.
In my work as a business coach, I hear so many business owners saying that they do not test and measure their marketing. And even though I’ve heard it so many times, it still amazes me. By not doing, the business owner is leaving their marketing to chance. Simply put, you have to manage something to measure it.
Businesses all over the world, every day, are losing money and destroying their profits because they fail to measure what they do and end up wasting resources that can be put to better use.
Although this is true in every aspect of the business, it tends to be particularly more common when it comes to marketing.
I hear so many business owners tell me: “We spend lots of money on advertising, but I’m not sure what’s working or what I get back from it.”
Marketing, and the advertising aspects of marketing, can be very expensive. It costs about six or seven times more money to attract new customers than it does to sell to your existing customers. If you are blindly spending money without understanding the return you get, your business is heading for a slippery slope.
Understanding what you invest in marketing is a fundamental key to a profitable business. You need to understand your KPIs (key performance indicators) – you need information about these vital numbers to track what you can spend to bring in new customers, to know how much profit you make on each customer and other important factors that go into making your business profitable and your marketing an investment, not an expense.
As with all investments, marketing needs to be measured to ensure that it is giving you a profitable return on your money.
When you test and measure, you stop blindly spending money on advertising and look at many streams of marketing and their effectiveness. Many of the strategies can be relatively inexpensive, such as referral strategies, email campaigns and asking for recommendations.
Having done the work and converted your prospects into shoppers, it is time to focus on moving them up the ladder of loyalty so that you will have lifelong customers. I will be blogging about the ladder of loyalty next week.
Marketing is maths – as well as the acquisition cost, you also need to look at the lifelong value of a client to the business. When you test and measure – you have an unlimited marketing budget.
Remember to focus on exceptional customer service and have a USP (unique selling point) and a strong guarantee in place to keep customers coming back to you.
Do you test and measure your marketing activities?
And don’t forget to come back next week to hear more about the Ladder of Loyalty so that you can create more and more lifelong customers.
Coach Pam gives both one-to-one and group coaching sessions. If you would like more information on these, please browse the website for details or click here to get in touch.