Have you been buying your customers?
If not, you should be…
That’s the whole point of your “small business advertising” – to buy your clients…
Then they pay out more than the cost to get them…
Then it’s an investment…
So, since we agree that’s true… How much do your clients cost?
And what’s your Return on Investment (ROI) on that investment??
If you don’t know the answer to any of these, then you’re just one of many…
The majority of small business owners can’t confidently answer these questions with data based proof…
And hey, they’re still in business…
So it must not be that big of a deal, right??
Well, it depends on how far you want to take your business…
Most small business owners make less than mid-level management at medium and large businesses…
And many end up working a lot longer hours…
Few have even made it into the 6-figure income range…
Even less have achieved true wealth…
It’s these latter few who I consider financial successes… Business successes…
Why would you work 80 hour weeks for 40 hour pay…because you love what you do?
Didn’t we all start out trying to better our lives with our business?
If so, then maybe it’s about time for us to think again on how we’re spending on advertising…
Learn your costs for each customer, because if you know that they could double your profits… how much more would you pay out?
Well, that’s the name of the game in small biz advertising…
Give them a cookie now, get two back later…
Rinse and repeat… and repeat… and repeat…
Until it stops working… Don’t quit on your ad before it’s done working… Measure and track its response and profit until it’s no longer gaining any…
But I’m getting ahead of myself…
Let’s answer those questions from earlier…
Like your ROI on client acquisition costs.
There’s a couple points in your business where you need to measure your ROI…
The first thing you need to know is the break even point…
You’ll have cash flow problems if you don’t know this…
But if you learn where you break even, and within 7 days get that ROI of 1, then you can start to plan ahead…
You need to plan differently however if it takes you 7 weeks to reach that break even point…
Got it?
So, once you know your client-getting cost and your ROI at various points in time, let’s talk about how to improve your ROI…
There’s two steps towards making your ROI better in your marketing…
Lower the cost or increase the income… Incidentally, the only two ways to grow your business profits…
Finding better rates on advertising, or alternative and cheaper forms of media in order to have lower client acquisition costs are some ways to lower your costs…
It could lead to improving your ROI, but not by much…
Because at some point along lowering your front end costs, you’re going to reach zero…
But if your ROI is 1,000% on every dollar, then who cares right?
Well what matters to us as small business owners, is what do I get to keep at the end of the day?
All this adds up to is this – don’t strictly worry about your ROI and net profit…
By going the second way towards improving your ROI, you’ll succeed in two areas – a better ROI, and improved net profit…
Second being increased income from individual clients…
There are two ways to do this:
# Increase the transaction size for each client
# Increase the frequency of client purchases
To raise your transaction size, you could raise your prices, sell add-ons along with your product, or offer premium versions of your product or service…
To increase the frequency of buys, you can throw in subscriptions or memberships with your business, make new products to pitch to your clients, or use other company’s products through a joint venture…
Implement just one of these ideas in the next month and you’ll immediately see an increase in profits…
Remember, the difference between success being a simple dream or a reality is all about implementation of good ideas…
The majority of businesses that fail are run by owners with incredible ideas, but no will to implement them…
Don’t be that business owner…
Take what you are learning here and implement it – then share your success story with me so I can publish it on the blog…
As always, feel free to leave any comments or questions…
Here’s to always improving small business advertising!!!
