A Marketing Question
Discussion
if you get away with a 50/50 ratio you are doing exceedingly well!!!
what's your target market - is it a wide audience (public) or a smaller number of 'multipliers' - i.e. unrelated people who can provide a series opportunities to you
i view marketing as the latter - i.e. to a small audienece, whereas advertising is casting a wider net (this is only me definition tho! - they are very different things though)
what's your target market - is it a wide audience (public) or a smaller number of 'multipliers' - i.e. unrelated people who can provide a series opportunities to you
i view marketing as the latter - i.e. to a small audienece, whereas advertising is casting a wider net (this is only me definition tho! - they are very different things though)
It's a bit of a numbers game, in many ways. For example, a direct mail campaign:
1) Send out 5000 letters / flyers
2) 0.5% enquiry rate = 25 enquiries
3) A conversion rate of, say, 20% = 5 clients
4) A client retention of, say, 80% over three years, so 4 out of 5 are still clients in three years.
5) The average client spend over three years = £X
6) £X minus direct costs = contribution towards overheads (including sales costs).
If you stuff some 'real' numbers into the above and do the sums it should give you an idea of the financial viability of the marketing campaign. If you don't know the numbers, and it's amazing how many don't know, for example, the conversion rate, then I'd question how well you measure and control your business.
1) Send out 5000 letters / flyers
2) 0.5% enquiry rate = 25 enquiries
3) A conversion rate of, say, 20% = 5 clients
4) A client retention of, say, 80% over three years, so 4 out of 5 are still clients in three years.
5) The average client spend over three years = £X
6) £X minus direct costs = contribution towards overheads (including sales costs).
If you stuff some 'real' numbers into the above and do the sums it should give you an idea of the financial viability of the marketing campaign. If you don't know the numbers, and it's amazing how many don't know, for example, the conversion rate, then I'd question how well you measure and control your business.
Adverts in trade or professional journals seem to be a no-no for me, though I do occasionally put some hard-earned there to keep visibility up and nod to the 'repetition means reputation' doggerel.
Website generates OK business, word of mouth is free enough, flyers see a slightly higher hit-rate than srebbe64, and yes a good stock of solid repeat customers is great.
To take the thread on a slightly different direction, something I do each year that often leads to the bulk of my marketing spend is to do a "total audit" of me and my businesses to generate ideas for ten potential new revenue streams. Some may be related to existing business activity and some may not. Of the ten, about 6 or 7 aren't viable now (may be so later) or prove less attrative - this after more detailed analysis. Of the remaining three or so, one usually comes up with the goods and helps promote long-term profitability through diversification that's built on a solid existing personal strength or business platform.
Website generates OK business, word of mouth is free enough, flyers see a slightly higher hit-rate than srebbe64, and yes a good stock of solid repeat customers is great.
To take the thread on a slightly different direction, something I do each year that often leads to the bulk of my marketing spend is to do a "total audit" of me and my businesses to generate ideas for ten potential new revenue streams. Some may be related to existing business activity and some may not. Of the ten, about 6 or 7 aren't viable now (may be so later) or prove less attrative - this after more detailed analysis. Of the remaining three or so, one usually comes up with the goods and helps promote long-term profitability through diversification that's built on a solid existing personal strength or business platform.
How you approach marketing depends on so many variables as to be open ended - are you marketing a new company/product/service (in which case marketing spend would be a much higher investment than for a "normal" campaign for existing products to existing customers); are you targeting a specific segment or trying to catch-all; are you trying to retain exisitng customers or attract new ones....the list is endless.
We have been building our database of clients and possible clients and since November sending out mail shots just to raise the profile of the company and our products.
The reason being is that most of our clients used to only buy one product range from us. Since the start of the campaign we have had about 30 odd new customers from a base of 300 odd. More being added each week.
To me it is well worth the design time, printing on our printer and postage.
The reason being is that most of our clients used to only buy one product range from us. Since the start of the campaign we have had about 30 odd new customers from a base of 300 odd. More being added each week.
To me it is well worth the design time, printing on our printer and postage.
Have you thought about a form of sponsorship? This can be an excellent way of reaching people in an inobtrusive way and connect with people on an emotional level. If you fancy it, feel free to sponsor my universities Formula Student team
www.covunimotorsport.co.uk
www.covunimotorsport.co.uk
plasticpig said:
We have allocated all our budget to email and telesales marketing. Marketing spend per qualified lead is currently running at around £50 per lead generated.
We sell businesses and our sales cost per enquiry (an initial meeting) is about £2000 and our sales cost to generate an offer is about £8000. It focuses the mind somewhat that when you're holding a letter in your hand from a company offering to pay XXX for a business, as it cost £8k - and that excludes the cost of preparing the company for sale and other bits and bobs. Typically we'll generate 4 offers and accept one of them - so that's £32k to get one accepted offer. Than we have due-diligence etc.. etc.. etc.. I always find it helpful (and sobering) to analyse such things using cash as the point of reference.
srebbe64 said:
We sell businesses and our sales cost per enquiry (an initial meeting) is about £2000 and our sales cost to generate an offer is about £8000. It focuses the mind somewhat that when you're holding a letter in your hand from a company offering to pay XXX for a business, as it cost £8k - and that excludes the cost of preparing the company for sale and other bits and bobs. Typically we'll generate 4 offers and accept one of them - so that's £32k to get one accepted offer. Than we have due-diligence etc.. etc.. etc.. I always find it helpful (and sobering) to analyse such things using cash as the point of reference.
Intresting, do you work on a flat fee or commission basis or a mixture of both? I must admit that my figure does not factor in overheads but is just the outsourcing cost of the marketing. Factoring in overheads would be possible to do but in itslef would consume too much overhead to be worthwhile.
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