Increasing your Marketing ROI for Small Businesses
Over the past several weeks, a client and I have been looking at where his clients have come from and how best to find more. It’s a valuable exercise at any time, but especially now as he is faced with making contract renewals and determining where to spend his 2013 marketing budget; afterall everyone want a high marketing ROI (Return on Investment). It has been an extremely valuable experience and I want to share, step by step, what we did so you can put it into practice:
1. Look at every new customer from the past two years and determined what brought them to your business. Yes, it will be a lot of work and time, but honestly, is checking e-mail or Facebook more important?
- Find the details. For example, once my client identified business came from referrals, we looked at what the relationship was between the person referred and the person who did the referring. My client learned that his customers were most likely to refer co-workers, not family members as he had thought.
- Also research the precipitating cause of the prospects’ calls; consider individual life events (move, job change, family status change), a new or increased need for your service or product, poor care from another provider or loss of another provider. All of these are important in determining how to find more clients with the least amount of effort and resource
2. Outline your 2012 marketing dollars spent in detail.
3. Calculated the cost of each new client. For example, if you spent 2012 marketing dollars on radio advertising, divide the cost of radio ads by the number of clients who came to you as a direct result. This is your direct radio marketing cost per client. Some marketing may not directly yield customers but will instead reinforce your brand image. That’s okay, and you may determine that the resources spent are still worth it. If you can not directly tie new customers with marketing dollars spent, check in to see that your ego isn’t tied up in where you “should” be marketing your business.
4. Using what the corporate world calls “zero based budgeting”, and create a 2013 marketing budget. Starting at zero, build a marketing budget, justifying every dollar spent with two years worth of new customer source information.
5. Finally, identify 2013 milestones, points at which you can review your spending and make changes if necessary. Pre-defining these milestone points are critical to insure that too much time doesn’t pass without review or results. Equally important, the milestones insure that you don’t pull the plug prematurely, killing a campaign too early.
Marketing dollars can be tough to justify with data, so all too often we just keep on doing what we have been doing, latch on to the latest trend, or follow our colleagues when they have success. Be smarter this year and start with your own customers; just like my client, you will spend less, be more successful with finding prospects and increase your marketing return on investment (ROI). That’s excellence with ease.