If I ask you the simple question, “What’s the point of any business?” What will you say?
Hopefully, the answer includes; to make money, fill a need in the market, solve a problem, impact the world in a better way, etc. Right, now I’m going to say objective number one is to make money, because if you’re not making money, you’re not in business. However, the rest of the above are acceptable answers as they might be reasons why someone goes into business.
However, based on evidence at hand, you’d have to suspect that a vast majority of business owners, if they were honest with themselves based on the choices they make, would answer; to look the most professional, to rest on our laurels, to show the world just how wonderful I am/we are.
When this thinking consumes an industry, what the consumer is left with is a bunch of indistinguishable, albeit professional-looking, easily commoditized copycats. You can see this happening when every company is competing on price.
Now, don’t get me wrong, there is an absolute place for professionalism, such as in your communications, customer service, how you treat your employees, etc.
What I’m talking about is the number one priority for your marketing efforts.
Do you focus on results?
The problem with marketing is that most people look at it as a cost rather than look at it as an investment, which it is. Your marketing budget should provide you a positive return, if it’s not, you should consider this a warning that your profits are headed in the wrong direction. If you don’t know your return, you’d better start tracking your results.
The simplest way to measure your results is to track where every new customer or purchase comes from. Now, keep in mind that it isn’t this cut and dry, but it’s a good start.
For example, If you do a postcard mailing, online ad, or radio commercial, you can create custom offers that you can track back to that promotion, have your customer service reps ask how the customer found you, or use software that tracks your results automatically.
Tracking Lifetime Customer Value (LCV)
Ideally, the goal of any campaign is to provide net positive return right away. Meaning that for every dollar you spend, you get more than a dollar back.
However, sometimes it makes sense to take a loss up-front in order to earn a customer. This is because in the long-run, the customer is worth far more to you than what it cost to get him/her.
If you haven’t been tracking your results, you might not yet know this number, but I encourage you to start tracking and quickly find out what your average customer is worth to you.
For instance, if you are a chiropractor, an average client might be worth about $1500 to you during their lifetime of business with you. Without knowing this number, it might seem crazy to you to spend $100 to get a new customer. But, when you know that every time you spend $100 you get $1500, wouldn’t you do that all day, every day?
How do you get a better return on your marketing?
If you’d like to learn more, get a free copy of our ebook 7 Steps to Small Business Marketing Success.