This simple shift in mind-set will increase your marketing ROI, guaranteed!
People often ask me “what’s the one thing that I can do quickly and easily to get a better result from my marketing”. Not surprisingly, everyone’s looking for that elusive silver bullet to transform their marketing output. Well the good news guys, is that there IS a fundamental principle that will transform your marketing results, and what’s most surprising is that so few business people are aware of it.
I believe that business should be like any other professional vocation; you need to know your subject and continually update and expand your knowledge; and you probably feel the same – that’s why you’re reading this blog!
So what’s this amazing principle and how does it work?
Let me describe a scenario that many business owners and managers would recognise. The vast majority of people I meet in business have a view of marketing that looks not too dissimilar to gambling. They expect to pay a price for the risk they take in trying to marketing their offering, be it products or services. They accept, without question, that they’re going to throw money at marketing and hope that they get a result that makes a profit. This is known as ‘spray and pray’. I’ve even met people who tell me that as long as they don’t lose money on their marketing spend they’ll be happy… crazy!
Marketing is actually very simple; it’s not an exact science and you’ll need to accept that some guesswork is required. However, there’s a fundamental principle you need to know before you commit to spending anything on your marketing and this is it:
Learn how to BUY more customers at a PROFIT.
Most people spend their budget and hope that they’ll get enough back to make it worthwhile. This is a totally flawed approach and if it’s one you’re using now, I implore you to consider what I’m about to tell you next.
Take a long hard look at your figures and understand the relationship between the Average Lifetime Customer Value in your business and your accepted/defined Cost of Acquisition. The relationship between these two will tell you how much you are able to spend to BUY each new customer at a profit. So start with what your figures tell you and they will guide your marketing strategy.
I’ve described this as a form of Inside-Out thinking for marketing. Many business owners/managers are looking outside for the answer, they want to use resources to go out and hunt down enough customers to keep the business alive. Instead, they should understand what their business is able and willing to spend to buy each new customer.
When you know the relationship between the real value of each customer (by looking at your margins) and have decided what you feel is worth paying to buy them (known as Cost of Acquisition) you will have a defined budget that you can work within and always ensure your marketing is profitable.
Applying this sort of mind-set to the way you view your marketing will transform your overall strategy. You’ll understand what you need to do to acquire more sales and build customer relationships that support and grow your business. You’ll feel in more control and above all you will feel far more confident in your marketing.
If you want to know more about this principle visit my blog on www.nialadams.com and look out for the next edition of The Marketing Index about to be released.