I had an interesting conversation with a potential client earlier this week – we were talking about how I could help with marketing planning and help them understand where they should be focusing their activity. Whilst they were happy to invest in my time, there was a clear reluctance to ‘spend’ more on marketing ongoing. And to be honest, this is not unusual. A lot of business owners are fearful of spending – and in doing so, they are massively limiting their ability to GROW.
So, let’s look at the issues this raises here…
- Business owners are anxious about overspending generally, in order to maximise profit. However, failing to invest in marketing – the right marketing that is – can only have the impact of restricting growth. It is therefore a false economy to fail to invest in activities that lead directly to sales.
- Which brings me to the next point – marketing has to be trackable and accountable. If you can’t see the direct relationship between the activity and sales, then it is almost certainly the wrong activity. Too many small businesses spend time and money on ‘brand’ advertising, which is a luxury few can afford. A simple rule is – if it isn’t likely to lead direct to a sale, don’t do it.
- Which means that you need to be able to track exactly where your business is coming from. The use of trackable phone numbers, offer codes, unique links etc. will help you understand where your money is best invested.
- You need to be prepared to test stuff out – thinking out of the box and doing stuff your competitors aren’t can really pay dividends but you need to have clear criteria for success and be prepared to bin it if it doesn’t work. Split testing is critical too – sometimes the change of offer, the visual or a headline will make all the difference.
- Key to a preparedness to invest is the knowledge of how much you are prepared to pay to bring in a new customer. If, as a consultant, your gross profit on a sale is £3000, would you be prepared to spend £300 or even £500 to achieve that? Of course, as a manufacturer or retailer, your margins are likely to be much lower which will impact the ‘right amount’ to invest.
- You also need to know your conversion ratios – if it takes 10 leads in to achieve one sale, then your investment per lead will be one tenth – ie in the example above, that’s £30 to get a lead … leading to £300 to achieve a customer. This is incredibly liberating and allows you to apply some proper science to your marketing spend. Ask ourself, if every time you give me £100, I give you £500 back – when would you stop giving me £100?
Put simply, if you want to grow your business significantly in the next year, it’s not happening for free! And the best way of minimising your financial risk is to plan properly. That way you’ll know: 1) how much is right to spend; 2) who you need to attract; 3) which media is most likely to find them; and 4) what message is most likely to draw them towards you.
And of course, the great news at the moment is that there is money available from the Government to help you plan. If you want to know more about how to get hold of your £2000 match funding, get in contact with me – firstname.lastname@example.org