How often do you ask yourself if you’re paying for marketing that doesn’t work?
In my sessions with business owners, I will sometimes ask if they would hire an employee for $40,000 a year and then never check to see if they accomplished anything or even showed up to work. They usually look at me as if I have two heads, and say “Of course not!” Then I ask, why they do just that with their marketing budget? Then the look changes to mild guilt.
Obviously, your marketing budget may be significantly more, or a lot less, but the principle remains the same. Our marketing spends are often determined by what we have done in the past, or what we feel is affordable. I spoke to a business owner who told me they stopped advertising in a directory completely after having run the equivalent of a full-page ad for an extensive time. When I asked why, they said it was too expensive. I asked what type of results they had gotten, and if they received any type of reporting. The business owner indicated the reporting was excellent, but they were too busy to ever look at the reports.
“If you can’t read the scoreboard then you don’t know the score. If you don’t know the score, you can’t tell the winners from the losers.” Warren Buffet
I’m not promoting one advertising medium over another as they all have their strengths and applications. I am saying that unless you want the equivalent of a $40,000 employee that does not show up, it is imperative that we test and measure the results from our marketing to make informed decisions on what to increase, decrease, add and subtract. Here are a few simple concepts to start the process.
Define your purpose for the marketing investment:
If the purpose of the marketing is to drive revenues and profits, then the measurements of success need to reflect that. If the purpose is something else, like create brand awareness or educate, then adjust your measurements accordingly.
Track your leads and record the prospect’s data:
At the very minimum always ask the prospect some version of “How did you hear about us?” Collect their information and put it in a database. The goal is to know how many leads (and ultimately how much profit) per week or month are coming from each marketing medium and be able to continue to contact those leads. I know from my mystery shopping this is a huge leak in the pipeline for most businesses.
Know your key numbers:
Marketing is simply a matter of buying clients for less than their lifetime values. Many businesses will not break even until after a new client makes more than two purchases. A chiropractor and a hair salon are two good examples where loyal clients have many transactions over a period of years. The two key numbers are acquisition cost (cost of gaining a new client) and lifetime value (how much in total the average new client will spend as your client). The key to making marketing an investment is to keep the acquisition cost as low as possible while driving the lifetime value as high as possible. How much do customers from each lead source spend with you? Do you know your numbers?
Use the information you collect to make educated decisions:
Once we record the information over time, we will know the acquisition cost for each marketing method as well as the number of new clients driven by each technique. You will likely notice a significant difference in the lifetime value of clients from different method. Build the information over time and use it to determine how to allocate your budget.
There are entire books written about these concepts and others. The real key is to start systematically recording your information now to increase your revenues and build your decision-making database.
Whatever you do, make sure you’re getting a great return on your investment from that $40,000 employee!
Learn more about marketing and other business results generators at GrowthClub June 20th.
How your competitors are getting ahead.
Every business has its competitors. And while market analysis isn’t exactly a new practice, markets for any product or service are becoming increasingly competitive. Today’s key players are constantly hunting for ways to fine-tune their intel. If you’re already on top of knowing your competitors, great, but the thing is, instead of turning only to who you’re competing with, don’t forget to also focus on who you’re competing for.
As a small business owner, you are aware of the competitors in your local marketplace, but what about online? During the buyer’s journey (the marketing funnel), potential customers are looking to your website for education on your products or services. In fact, 97% of consumers use online media when researching their local market (1). Because of this situation, businesses no longer control the selling process — buyers do.
Your company’s website is a key factor to converting leads. In order to maximize its full potential, you’ll need to assess how your marketing efforts are stacking up against your competitors. Keep reading to learn the key steps to conducting a market analysis, putting you two moves ahead of your competitors.
Identifying multi-level competitors
When you’re a small business, you might consider the obvious multi-million company as your competitor. In this step, choose your top three competitors on a local level, a regional level, and a national scale. Also consider other alternatives your customers could buy instead, products from companies that are indirect competitors. Acting as a starting point, this helps you narrow your audience, working your way outwards.
Drawing in your target audience
It’s one thing to speak loudly, it’s another for people to listen. Trends are showing that audiences are less likely to respond to salesy ads and traditional banners. Instead, opt for a genuine relationship with your customers, one that you nurture over time. You can do this through high-value content, give away resources (such as how-to guides), and social media. You have to give before you can get.
Assessing your website conversions
Your website is pretty, but is it bringing in numbers? Do you consistently look at your analytics data, do you see patterns? If your page loads too slowly, or your search terms are misleading, you may have a high bounce rate. If you’re providing great blogs, your click-through rate is fantastic, but are you asking them to take a specific action? The answers are all there in the stats. Next, you’ll want to take a look at the overall growth and measure it side-by-side with your revenue. Customers are actively looking for value, especially online. How well are you positioning them with the content you’re providing?
Considering industry trends
The world is changing every day, the same pertains to technology. With Google and Facebook accounting for 76% of internet advertising growth this past year, it’s wise to incorporate trending factors into your strategy. Mobile is exploding and visual engagement continues to excel. Opt for stunning visuals with value-rich content to gain the attention of customers.
Identifying areas of improvement
Are you blogging at least once a week? When was the last time you updated your website content? Always be looking for areas to improve. As you bring in customers, ask how they found you. If online, dig a little deeper and find out where. We highly recommend performing a quarterly marketing analysis to identify strengths and hurdles, project trends, and adapt your plan of action.
How do you use market analysis to steer your advertising efforts? Share your ideas with us.
Advertise Online For Free
According to marketing experts, businesses spend somewhere between 2-5% of their gross sales just on advertising. Unfortunately, many small businesses which are still relatively new do not have that kind of revenue to invest in marketing in order to get the sales they want. However, they can benefit from free advertising for small businesses through online marketing.
Start By Creating a Web Presence With Email
The internet can be a lethal tool, especially when it comes to marketing and letting the world know that your business is there to fulfill your customers needs. There are many free outlets which are available online to reach leads for your business that you can convert to customers.
Assuming you have already set up a website available through free domains, and have created a logo for your business. If you don’t have a logo, you can have a basic one made for very low cost. Here is where most small businesses fall short – and I’m surprised nearly daily to see that they don’t have an email address set up for their domain name, but are using gmail or yahoo addresses etc.. By using a generic email domain, you are missing a chance to advertise every single time you send an email message. Not to mention that it just looks unprofessional. If you want customers to take you seriously, get email set up for your business domain.
Using Social Media As A Platform
Social media platforms such as Twitter and Facebook are free online advertising for small businesses. Facebook lets you create a page for your business, manage it, and lets you share it on different platforms to catch the attention from people worldwide.
In order to gain more publicity, you should continuously post updates, host giveaways, and offer special deals which are available only for those Facebook users who visit your website.
Twitter is another free social platform which allows you to advertise online as a small businesses. Twitter allows you to have a direct one-on-one conversation with your customer. You can even customize your profile page according to the nature or theme of your business. Hosting giveaways can be done on this platform as well. You can even give shout-outs to regular customers and offer them giveaways.
Have A Signature
Every email you send, have a small 3-4 line signature which includes the link to your website, your contact number, address, and links to your social media pages. This helps build an online presence for your business. It is another great and effective way to advertise online for free for small businesses.
Not sure how you’re doing with your Social Media efforts? Grab my free ebook titled “6 Mistakes To Avoid Using Social Media”. Just go to 6 Mistakes Social Media ebook to grab it. I know it will help you save time by avoiding some of the common mistakes I’ve seen my clients make in the past.
In more than 25 years of making pricing decisions and of observing others making pricing decisions, I have come to the conclusion that there is no single business decision that you can make more quickly, but which deserves more thoughtful consideration than the decision of what to charge for one’s goods and services. As a business coach, it still surprises me that business owners and managers don’t do the right analysis before making this critical decision.
If you set your prices too low, you’ll lose money! Set your prices too high and you’ll also lose money! Lets look at an example: if your Gross Profit Margin = 40%, then a 10% decrease (or increase) in prices will decrease (or increase) Gross Profit by 25% (assuming no change in volume). Net profit (what is left after you’ve paid everything) will change even more dramatically.
But wait a minute; if you decrease prices won’t you make it up in volume? Maybe. Using the same assumptions – 40% Gross Margin and a 10% price decrease, since you are selling the units at a lower price and therefore a 25% lower margin, you’d have to sell 35% more volume just to break even on your price discount! You will need a great marketing plan & sales process to ensure more than a 35% increase in volume. And that’s just to break even. Plus you’ll be working a lot harder to produce a 35% increase in volume, to get the same net profit.
Instead of considering discounting to increase your bottom line, think about how you can add value and charge even more. The best way to remove price as an objection by your buyers, is to have a strong and sustainable Unique Selling Proposition. A strong USP will distinguish your business from all the competitors. It will make you the obvious choice in a sea of competition and lead prospects to the conclusion, “I would have to be a fool to do business with anyone but you…regardless of price.” Your USP is something that your competitors can’t or won’t say, that you can uniquely deliver. And it will change the conversation with your prospects from cost based, to value.
USP is a simple concept, but not easy to do. It takes a focused, dedicated process to discover your own USP. It isn’t going to just appear magically. In his book, Purple Cow, Seth Godin explains that the USP must be as remarkable as seeing a Purple Cow. And just like a purple cow, sometimes you have to sit down at the drawing board and create one yourself.
Lisa Walker, ActionCOACH, is a Certified Business Coach who provides services for small and medium sized businesses, helping them to grow and become profitable through the use of proven tools, methodologies, and systems. Lisa targets her clients’ individual needs so they can achieve their goals and realize their dreams.
5 Keys To Telling A Great Brand Story
One of the best ways to introduce or re-introduce a brand in the market and make sure that the customers will remember it is to tell a great brand story which will grip the target market with interest. A gripping story is the best way to captivate the audience and make the brand come alive for everyone. The more interesting the story, the more relatable your brand is. And customers just love a brand they can relate to.
So what are the ways to tell a great brand story? Here are the 5 things that make a brand story a sure success and help a company attract the attention of your target market.
1. Choose True Stories
Your brand identity should never be marred with a falsehood. If you associate one false story with your brand, your customers will lose trust and you will do irreparable damage to your organizational brand.
Make sure that the story you choose to tell, is simply – true. Tell any story that signifies what the brand is really about; just don’t craft a false story for the sake of telling one. While being creative and honest, you have a high chance of wowing your audience with your brand story.
2. Have Relatable Characters
Choose characters which your audience will love and which are easily relatable to your brand story. Characters they will have run across in their own experiences and lives.
3. Connect With The Audience
Make sure that your story keeps the audience waiting for more! The next story, the sequel, and the next promo. Meet your purpose by keeping them captivated.
4. Follow The Story Writing Rules
Start off with a strong opening to engage the audience from the start. Then proceed to discuss a problem or issue, the solution, and close with a value added message, information, brand introduction or a resolution which will keep your audience gripped for more.
5. Flaunt Your Brand Personality
Showing off the features of your brand is the primary goal, so design a story which has the brand personality as a spotlight. It is not advisable to have a salesy story. Just infuse the personality of the brand, maybe with an element of fun, to create something unique! Make your brand story stand out from the others in the industry.
With a number of social media platforms to tell your brand story, make sure that you prepare the best to interest the audience, and have them coming back for more every time!
Need more? Get in touch to schedule a one to one session.
Increase Profit Margins Now
Welcome to step 5 of the 5 Steps to Increased Profits framework – focusing on one of the five steps each week. As a review, the five key profit-generating metrics are: Lead Generation, Conversion Rate, Average Dollar Sale, Number of Transactions, and Profit Margins.
I’ve highlighted the five keys in the following equation:
Avg. Dollar Sale
Avg. # Transactions
I talked last post about the importance of ensuring you boost your number of transactions, which is another way of measuring customer loyalty – or repeat business. This week we focus on how to increase profit margins – because that IS the bottom line. Who cares how much revenue you’re generating if there is nothing left at the end of the month, you’re just working too hard for nothing.
Profit Margins are critical to your overall profitability. You can have a fast growing or high revenue generating business but without acceptable profit margins, all of your growth efforts will be for nothing. It is critically important that you not only know your overall margins, but you must know them by product or service type.
Why is this so important? Because you want to promote your highest margin products and services whenever you can. These are the game-changers for you. These products and services are the ones that provide the resources to cover your costs and provide you with resources to invest in your business.
There are two primary ways you can improve the Profit Margins in your business – reduce your expenses or raise your prices. Most cringe at the thought of raising prices, especially in fragile markets, but if you have done the hard work of creating a Unique Selling Position and have truly differentiated yourself from your competition, and know your target market extremely well, then raising your prices may be an option – but don’t do it blindly.
It is mainly fear of the unknown that keeps business owners from taking the bold step to increase their margins through a price increase. Know your numbers, your market, your customers. Studies have shown that your loyal customers are not doing business from you because of price alone. Most will understand and appreciate your rationale and will remain strong, loyal customers – that is if you have treated them like they were special and found ways to deliver MORE than they expected of you.
Cutting is costs is often times easier, but not necessarily the right move to make when you are trying to grow your company. Eliminating waste is always good, but often times expense cutting comes in the form of eliminating services, reducing marketing programs designed to grow your business, or reducing staff and degrading your ability to deliver on your promise. Be careful not to impact your operational efficiency and speed of delivery when reducing your expenses. The last thing you want to do is to become a “me too” business simply because of your efforts to cut costs.
Now, with that caution in mind, there are always ways to gain efficiency and reduce the effective cost of your system. Toyota and other large manufacturing companies, are masters at eliminating costs through waste reduction, efficiency gains, reduced work in process inventories and unnecessary movement of people and supplies. If they can do it, so can you. When was the last time you critically evaluated your business operations with an eye towards gaining efficiencies and reducing unnecessary steps on your process? Creating systems for your business is a powerful way to reduce your costs –while at the same time, improving your productivity and customer satisfaction. If you are not familiar with the tools and techniques for doing this, drop me a note and I will direct you to them.
The challenge is to first know your margins, then be purposeful about improving them on a regular and steady basis. The trend for your margins should always be favorable. While this is the last of the 5 Steps, it’s actually the one you should work on first (now she tells me!). Work hard on this last segment of the Business Chassis and you will position yourself for phenomenal growth and incredible profits!