Let’s address the elephant in the room right away. Most (not all) businesses have had bad experiences with marketing agencies to the point of feeling burned. I’ve heard this from dozens and dozens of business owners.
And yet… without marketing… your business has very little chance to attract new clients/customers/jobs. You can have the best service in your sector but if no one knows of you, you will be eaten up by your competitors who are marketing.
Marketing Is A Necessary Evil
If you are in any business vertical that has competition, marketing cannot be ignored. If you don’t at least keep up with your competitors regarding awareness, visibility and even sales, you will have a very difficult time growing your revenues. You will be in a state of frustration that will not go away until you come to the realization you need to invest consistently in marketing.
The SBA Reports Your Marketing Investment Should Be
This was a screenshot taken right off a google search from the SMA (small business association). As you’ll see…the number is 7-8% of your gross annual revenues for marketing and advertising if you’re less than $5M.
This will be an eye-opener for you, but there is a reason why only 50% of small businesses survive past the 5-year mark. There is obviously a lot more factors than just marketing, but many startup businesses do not invest the appropriate amount early on to gain awareness and market share.
If you’re in a competitive market and your product or service is in the thousands of dollars, you may need to invest 10% of gross revenues or more to compete. I love the quote by Jeff Bezo’s of Amazon.com… “the business willing to invest the most to acquire a customer wins”.
If you can’t wrap your mind around these numbers, having your own business might not be right for you.
Know Your Business Metrics
Some of the key numbers you should know and stay on top of are:
- Cost per lead
- Cost to acquire a new client/customer
- Conversion percentage from lead to new client/customer
- Value of a client/customer (initial transaction)
- Lifetime value of a client/customer
- Attrition if applicable
- Referrals per client/customer
The above numbers should be the main ones to stay on top of on at least a quarterly basis, if not a monthly basis.
Monitor Your Marketing For ROI
As a business owner you may be looking at marketing as a cost. With that mindset you will have a very difficult time understanding the importance of marketing and how it can positively affect your bottom line.
With all this being said, making sure to monitor your marketing closely is critical. If you are not getting a positive ROI in 60-90 days, you must pivot your strategy and try something else.
With marketing there is no guarantee. No one can promise results. That’s impossible. But, you can implement a strategy, test it, and tweak it if necessary to get that positive return on investment.
T’he key to any successful marketing campaign is consistency. Without consistency, like anything in life, you will not get the results you are looking for and be frustrated indefinitely.
If you are a business that has a strong desire to grow your revenues and realizes marketing is a must, let’s have a quick 15-minute exploratory call where I will show you your market opportunity and see if we are a good fit.
Contact Us Today To Schedule Your Call With Mike Pedersen