Have a Marketing Strategy
The Four Keys To Creating A Marketing Plan To Explode Your Business Profits
There are several key principles which will also impact your success. These four key factors are so important to your business success in this new economy, that unless you build your marketing strategies using them, you will have a 99% chance of failing. So, take your time with these four cornerstone principles and then implement them into your business.
Key #1: Calculate The Lifetime Value of Your Customer
When business owners hire me to help turn their business into a money-maker, one of the first things I do is calculate the lifetime value of their customers. The lifetime value (LTV) of a customer is the amount of profit each customer brings to your business over the course of their buying lifetime with your business. Now, I will show you a simple way to calculate the LTV, but unless you keep great records you should probably hire a bookkeeper to dig through receipts and calculate the numbers for you.
In order to help you calculate your lifetime customer value, I will give you an example below.
|Total Amount of Customers for the year||100|
|Average # of purchases per customer||2|
|Average Purchase Amount||$125.00|
|(100 x 2 x $125) Total Revenue||$25,000.00|
|Cost to produce each product or service (including parts & labor)||$35.00|
|Total cost to produce product for the 100 customers (100 x $35)||$3,500.00|
|Marketing Costs for the year||$5,000.00|
|Total Revenue – Costs = Gross Profit
($25,000 – $8,500)
|Customer Lifetime Value For The Year
($16,500 / 100 customers)
So, in this example on average each customer represents $165 worth of profit.
So, in the example I used above, when someone buys from that business, on average they represent at least $165 in profit. However, it doesn’t have to stop there. In fact, your goal should be to increase the lifetime value of each customer by getting them back into your business to purchase from you more often.
The reason why the lifetime value of a customer is so important is because it gives you an idea of how much you should invest in marketing to get the customer in the first place. So, in the example above the business owner knows that if he spends another $5,000 in marketing in the same ways he’s investing in marketing now, he can reasonably expect to double his profits. Without knowing the lifetime value of his customers, he wouldn’t have the confidence to make that kind of investment in marketing.
Key #2: Find Out The Source Of Every Lead That Comes Into Your Business
If there was one piece of advice that I would want you to remember from this entire book, it would be tracking where every lead comes from that you get into your business. In order to track where your leads come from, you can ask prospects when they walk into your business or you can use special phone numbers with unique extensions in your ads. You can also use five page websites designed for a specific sale, coupons, tracking codes or anything else you can think of know exactly where your prospects are coming from.
At the end of the day, you absolutely need to know exactly where your leads are coming from, so that you can know exactly what’s working in your business. Once you know where your leads are coming from, then you can begin to invest marketing in those specific areas that are generating the best leads and customers. Without tracking your leads, you will always be wasting thousands of dollars on ineffective marketing strategies.
Key #3: Calculate Your Return On Investment For Any Marketing That You Do
This crucial key builds on the previous key that I mentioned. Quite honestly, the only way to truly know your return on investment is to track the results of every marketing strategy. Once you know how much you are spending, then you will know exactly how much each marketing dollar is bringing back to your business.
For example, if you spent $500 on an ad in a local newspaper which generated two customers, who then spent a total of $3,500 in your business, your return on your investment is 700%! So for every $1 you spent, you received $7 back. That’s a very good investment by my standards.
Key #4: Create Ads And Marketing Materials That Consistently Put Money In Your Pocket:
If you ever want to see a huge waste of money, then watch the ads being played during the Super Bowl. Those ads that run during the Super Bowl ads are designed to be funny and cute and win advertising awards. However, those ads rarely make their companies any real profit. As a matter of fact, those commercials are the laughing stock of the marketing industry because companies blissfully line up and pay millions for those types of “funny” ads while receiving little to no results for their marketing dollars.
The fact of the matter is, you either need to know how to write and design good ads or have the resources to hire a good copywriter. Regardless of which option you choose, I encourage you to study good copywriters so that they have a feel for what usually works. As the owner, you should definitely know how to create ads, letters and emails that generate leads. A good expert to study to learn copywriting is Dan Kennedy. Simply type in his name in Google.com and you will find tons of resources about copywriting.
Here’s a quick tip sheet on the basics which every ad you create should have:
- Use headlines that attract customers.
- Always have a compelling offer.
- Use a specific start date and deadline in your ad.
- Insert testimonials from past customers.
- Include a guarantee on your products and services.
- Your ad must look unique and stand out from your competitors.
- Your ad must ONLY focus on what your customer wants.
- Have only one goal for each ad, which is to get customers to visit your business.
- Tell the reason why you’re offering the sale.
- Write ads that are straight to the point and easy to understand.
Now, the keys to success listed above may seem like a lot of hard work, but you only have to do the hardest work in the beginning. However, the most important factor which will contribute to your success in your business is your willingness to actually implement these strategies on a consistent basis.
Create A 12-Month MarketingPlan…Right Now!
There is an timeless saying that goes like this: “Failing to plan means you are planning to fail.” That saying is twice as true when it comes to running a business. See, most business owners will not be able to weather this economic storm simply because they don’t have the foggiest clue about what promotions or ads they are going to running in the next week, much less in the next month or year! However, this must change if you are going to survive and thrive in this new economy.
Now, coming up with a twelve month marketing plan may seem like a daunting task, but most of the work is already completed for you. How, you ask? Well, customers are already expecting you to have a special sale or promotion at least once a month, on the major holidays. Therefore, you don’t have to recreate the wheel; you can just ride the wave of marketing and advertising messages that are already around that time frame.
While the dates are already set on the calendar, it is still important that you have compelling words and language in your advertisements that reward your customers for buying from you on that specific holiday. Do NOT run a general advertisement that simply says you have stuff on sale. Your ads need to match the holiday theme as closely as possible.
The other benefit you receive from creating a yearly marketing calendar is you will gain a feeling of confidence and reassurance because you are not just sitting on your hands, day-in and day-out, waiting for customers to just walk in and maybe buy something from you.
Let’s look at a sample twelve month marketing calendar that you could create around monthly holidays:
- January – New Year’s
- February – Valentine’s Day
- March – President’s Day
- April – April Fool’s/Easter
- May – Mother’s Day
- June – Father’s Day
- July – Fourth of July
- August – (There are no major U.S. Holidays, so do a friends and family sale)
- September – Labor Day
- October – Halloween
- November – Thanksgiving
- December – Christmas
Identify your communication channels
How I am going to communicate with my customers?
What types of message will appeal to them?
What style of communication would be most relevant to them?
What type of language do they use?
What publications do they read?
Where do they socialize?
Where do they spend their time?
What access do they have to the Internet?
What social media sites do they hang out on?
Use the answers to these questions to determine what type of marketing and where will best attract your “Ideal Guest.”