Is Your Marketing An Expense Or An Investment?
The key is to test and measure ...
POSTED BY PAUL BROOKSBANK ON 20/09/2018 @ 8:00AM
If you aren't testing and measuring every part of your marketing and sales process you could be costing yourself a small fortune! Have you heard the old saying that ''half your marketing works and half doesn't'' ...
If you want to discover if your marketing is an expense or an investment, test and measure it!
copyright: kritchanut / 123rf
People also say that "you never know which half"! That's absolutely Rubbish; the only reason you don't know what does and doesn't work is that you aren't testing and measuring it.
"If you test and measure your marketing, you can ensure that it is definitely an investment and is all about buying customers!"
Let's say you spent £1,000 on a marketing strategy, how many sales would you need to make to break even? What is your cost per lead and per sale?
If this strategy got you 100 leads and you converted 10%:
£1,000 / 100 leads = £10 per lead
£1,000 / 10 sales = £100 per sale
Now, you need to look at the average profit from each sale. If you are earning less than £100 from each sale, then it costs you money to buy those customers.
You do need to take into account the number of times that customer buys from you as it may cost you money if they only buy once, but make you money as long as they buy 2, 3 or 4 times. If you need them to buy more than once you need to make sure you stay in touch so they remember you when they are ready to buy again.
If this strategy got you 100 leads and you converted 20%:
£1,000 / 100 leads = £10 per lead
£1,000 / 20 sales = £50 per sale
As long as your profit per sale is over £50 then you are making money and it is a successful investment. All you need to decide is which strategy makes you the most profit and how many times you'll invest in it?
There have been so many occasions when a business starts testing and measuring their marketing and they find that, for example, a strategy they regularly use, never actually brings them any clients in.
"As soon as they know, and modify or scrap that one, they make instant savings in the business!"
If you're not yet testing and measuring the marketing activity in your business, then do give me a call on 07590 584642 or click here to ping me an email and let's see how I can help you.
Until next time ...
If you're looking for a specialist business coach in the Bedford area, you can find out more about me by visiting paulbrooksbank.actioncoach.co.uk . Let's see how I can help you achieve your goals!
Are you a motivated business owner working far more hours than you would like in an average week? Do you feel frustrated that despite the hours you work, your business isn’t growing as fast as you’d like and profits aren’t at the level you think they should be? Is a lot of your working week spent fire-fighting and do you think that your time spent in the business could be more productive?
Do you feel like there’s untapped potential in your business but you are so bogged down working ‘IN’ your business, that you lack the time, energy and resources to work ‘ON’ your business and take it to the next level? Would you like to know how you can both reduce the hours you’re working and grow your business faster? And yes, it is possible.
If so, business coaching could be right for you!