Have you ever believed you had to have a marketing plan that would find every prospect and convert every one of them into a junkie for whatever it was you are selling? And then you over did both the planning and investment and ended up with more business you could handle and had to either expand your capacity of refer your prospects to colleagues. Yeah, me, too. Hurts, doesn’t it.
Business planning — and the branding, marketing, and advertising (BMA) planning that goes in it — is not about getting all the business. It’s about get just the right flow of business to effectively and efficiently hit your volume target so you can deliver products or services ahead of schedule, under budget, and right the first time around and make the amount of income you want, need, and desire to live the life you want, need, and desire.
Prime examples of this are the Groupon and Living Social failures. Worse than killing themselves, however, these marketing portals killed a lot of their customers using their discount coupon generators as well. All people had to do is pay Groupon and Living Social gobs of money and a great flow of new customers would jump across their thresholds. Oftentimes, however, more people picked up the deal o’ the day and creamed the business owners.
So what’s a small business owner to do? Build and use a multi-focal plan with scalable components you can throttle up and down as needed. Let’s peek at how to do this.
Picking up where we left off a few posts ago … we are a professional-service-oriented business that needs to generate $300,000 a year in revenue with $30,000 of BMA expenses. Assuming even average sales each month, but knowing things are going to ebb and flow with feasts and famine, we need to design a BMA plan that will generate $25,000 in monthly revenue for $2,500 on average per month. How do we do that?
The first thing you need to determine is, “How many new clients do I have to attract each month?” This can be revealed as a simple math problem with monthly revenue being divided by monthly spend per client. If each client spends $500 for a service, then one needs 50 new clients a month. Assuming all things being equal, you can spend $50 per client to successfully sign each client. But, wait, there’s more. What happens if you are only signing half the prospects your BMA plan brings in the top of your sales funnel. Then you can only afford to pay $25 per warm lead from the “professional referral online marketing organization” (PROMO) service for which you’ve signed up.
But, wait, there’s still more. Lead generation promoters are not going to be the one and only, be all, do all, end all of your BMA plan. So you can’t spend your entire monthly marketing budget on referral promo services.
Starting to see how difficult this is going to be to do? There are no easy solutions. The good thing about lead generation services is most of them are easily scalable. You can set a budget and the services will only send you whatever flow of leads you can afford for that budget. In our example, if they were charging you $25 per lead and you were putting 20% of your $2,500 monthly budget, i.e. $500 per month, then you are going to get 20 warm leads from your promoter, which, with a 50% closure rate, will only yield you 10 clients and $5,000 in monthly sales volume.
Nonetheless, if you put all $2,500 of your budget in your promoter program, then you are going to generate $25,000. Great, you’re on target. But, what about when your promoter goes the way of Groupon and Living Social? And, what about creating, hosting, and managing your website? What about doing any other type of BMA work?
In order to work out a full BMA plan, you are going to have to find some components that deliver you prospects for less than $25 per head.
More about that next time.
[reminder]What’s your most effective and efficient business lead generator?[/reminder]