Making The Shift To Earnings Growth

I recently asked over 100 small business owners three questions.

1) "What is your marketing budget?” The typical response was 3% to 8% of revenue.

2) “What is marketing?” The most common answers were Facebook, Google, websites, advertising or some other random tactic.

3) “What is your ROI?” had only one answer. “I don’t know that”.

To summarise, people spent 3-8% of revenue on random acts of marketing they didn’t bother to measure. It sounds like a tragic comedy, and yet, it is commonplace.

How Will You Answer?
You start with an ROI objective on a target sale to first-time customers or on a lifetime value assumption. Then you make a plan to accomplish your objectives.

Where Should You Start?
You start by mapping your target customer’s needs, promotional channels, and purchase path. Next, you break the purchase path into four or five stages where you forecast conversion rates and unit costs. Then you track results and work to improve your conversion rates and unit costs until you hit your ROI target.

It’s a continuous improvement process. Once you get set up, you must refine your sales process. You steadily simplify to increase customer relevance, boost urgency, and work to eliminate fear, doubt, or anything that would stop the customer along the way. The rewards for your business will include increased sales, new customers, and new profitable marketing investments.

Was That So Difficult?
What you did was shift your thinking from limiting expenses to actively managing your investment. This simple shift can change your business. Download these free eBooks: What is Marketing?, Making The Shift, and Increase Conversion Rates to get a handle on the process.

How do you ensure you're marketing effectively? Let us know in the comments!