Marketing Return on Investment
How do you build a $3 million business in an industry where the average business generates $750,000? Effective marketing. Our client uses direct mail, radio, TV, SEO, infomercials, newspaper ads, call centers, sales people, public relations and more. They invest an average of $24,000 per month in marketing, and have done so for years. What has been the key to their incredible success? They test and measure everything!
Every business uses their resources, i.e. money, time, team members, facilities, equipment, etc. to attract leads and gain new customers. This is done through marketing. “Marketing” is the activities and processes for creating, communication, delivering and exchanging offerings that have value for customers, clients, partners and society at large. Marketing attracts potential customers, otherwise known as leads. This is distinct from “selling”, which is the complete set of steps, or the process, of converting those leads (potential customers) into paying customers.
Most businesses think of marketing only as something you pay money for, i.e. a newsletter, newspaper, magazine, or billboard ad, radio or TV commercial, a flyer, a direct mail piece, pay-per-click internet marketing (i.e. Google Adwords), etc. Your investment, what you pay, is often easy to determine. Many businesses overlook their other marketing efforts, networking events, community, civil and religious group activities, client socializing, breakfast, lunches and dinners, even customer service (the best prospect you have is frequently a current customer). The latter investment isn’t just dollars; you must account for your time and that of your team members, your facilities, supplies and equipment, and often your “emotional capital” as well as all of your other resources.
Notice we use the term “investment”, not expense. The typical business owner, bookkeeper, or accountant looks at any outlay (of cash or other resources) as an expense. In the world of business intelligence, marketing is an investment made to produce revenue and profit for your business. If it does well, it’s a good investment; if it does poorly, or gets you no revenue and profit, it’s a bad investment. Viewing marketing as an investment, with very specific criteria for measuring Marketing Return on Investment, you are able to determine you:
Most profitable products and services
- Least profitable products and services
- Money losing products and services
Armed with this information in real time, you have the ability to intelligent decisions about which of your marketing strategies to:
- Increase your investment
- Reduce your investment
- Experiment new approaches, language, offers, vendors, advisors, etc.
- Bundle with other products or services
- Incentivize your selling team
- Use your creativity to improve your performance
So why has my client been so successful in building their business? They are constantly analyzing, updating and creating current and new strategies. Nothing is taken for granted. There are no “sacred cows”. If a strategy loses effectiveness, it is modified and tested. If it continues to decline, it is discontinued, sometimes temporarily, sometimes permanently. New strategies are tested incrementally; starting small and adjusting, adding more if it shows promise, discontinuing if results disappoint. They didn’t start as a $3 million business. And they won’t be for long. Soon they’ll be a $4 million, even $5 million business.
Would you like to build a million dollar or multi-million dollar business? We’ll show you how you can do that. There’s a proven step by step blueprint for getting the most from everything you invest in your marketing. It is not magic, and there are no gimmicks. It does require your time, diligence and accountability. Can you follow a proven plan?
Look for our next blog where we will show you how to have an almost unlimited marketing budget. Yeah, that sounds too good to be true. It’s the same strategy that the world’s fastest growing businesses use. Our clients use it, with incredible success. It can work for you, and it can work in any business.
Interested? Let us know what you’d like us to cover as we explain it to you, and we’ll do our best to answer your questions.