Everybody seems eager to hear the Chancellor’s Budget and many are planning their response as a business.
I get it, to an extent.
We know this has been a year like no other BUT what fascinates me about this whole ‘budget’ focus is that very few business owners I speak to actually have a budget for marketing, other than one of these two highly thought through options (ahem):
What we did last year plus or minus x percent.
What is left over.
That is madness, finger in the air stuff. No wonder marketing gets a bad reputation!
What if last year’s budget was based on finger in the air thinking too?
Why should marketing feed off the scraps when getting and keeping customers (this is all marketing really is) is the most important part of running a business?
Without these customers you have no business. So why place their acquisition and retention so low on the priority list in terms of budget?
Ask yourself a question.
What is a customer worth to you? If you’re a cafe, it might be £3.99. A restaurant, maybe £50.
If you’re a lawyer, let’s face it, it is probably a tad more.
What about me, the humble PR consultant…well, anywhere from £200 to £27,000.
Yes, £27,000.
I don’t see customers as a one off transaction, I see them all as long-term clients in waiting.
They vary from one-off strategy calls to boost their PR campaign or recurring fees to work with them for a few months. It might be a blog or two, a press release, a mini campaign or a retainer.
The fees vary hugely.
However, that larger figure of £27,000 isn’t a finger in the air guess or dream fee. It represents the average fee over the average length of an IDEAL retainer contract.
The point is, if I know the IDEAL ‘lifetime value’ of a client is £27,000, I’m now armed with information that helps me make a decision about how much I could/should spend to snaffle that client.
So if I’m aiming to win more retainers, I’m not thinking about the monthly retainer fee, I’m thinking far BIGGER. I’m thinking long-term.
For smaller services that I offer, I cut my marketing cloth accordingly but again, it is based on facts, not intuition.
It is based on what I need to achieve and what my figures were in terms of marketing (acquiring and keeping customers) for the previous year, quarter or campaign.
The key thing is, I know what I need and I know how to get it.
It is then up to me to play with my marketing strategy to ensure those leads come in at the right rate in terms of time and value and crucially, at the right cost that is acceptable to me, with the knowledge that I convert 60 percent of my qualified leads.
Sure, it is all very well winning the odd bit of work as a fluke but to be successful long-term you need to know your target, your conversion rate, your margin and your lifetime value. Then you can start to look at your marketing budget and how to spend it to get to that goal.
If you’d like to have a chat with me about how to do this, you’ll be pleased to know there’s no fee for that.
Yes, you can have a FREE strategy call with me because I know the value of that call with you with regards to my marketing campaign.
The question is, do you know yours?