Marketing — it’s a word that comes up in conversation when a new client comes on board, normally within the first two sentences. Why? Because they say “we need more clients so how should we market ourselves”, or words to that effect anyway.
However, marketing does not start with the “how” — there is a “what”, “where” and a “who” involved as well.
Every dollar spent on marketing — and there are too many of them to even contemplate here — normally gets written down as an expense in your accounts. From an accountant’s and the IRD’s perspective that’s exactly where it should go, but start thinking about it slightly differently.
Imagine if we put that dollar spent in the asset column, an asset that should return us a profit. Would that change how you looked at your marketing strategy?
If you spend a dollar on marketing you want to guarantee a dollar plus something back, if it was only that easy. It’s not, but you can shorten the odds by taking into account the following points:
1 What are you selling? Many clients will answer “me, ABC Builders”. And that’s okay but narrowing it down makes the marketing a lot easier. Marketing a name could also become just a branding exercise and, again, that’s okay, but in many cases this is an expensive exercise and the returns are less.
So the “what” should be a service, a product or a design, and if it’s something unique that’s even better. For example, ABC Builders is offering a 4-bedroom, 4-bathroom, 2-storey house with triple garage, which can be built to your design in under 10 weeks for only $300,000.
Okay, that’s pushing the boundaries of reality a little, but this type of “what” is not all about ABC Builders anymore, but more about a client’s dreams. It just so happens that ABC can fulfil those dreams.
2 Who are you trying to market to? Many clients will say “everybody”, but not everybody will fit into your 80/20 rule of past clients. Take a look back at who your clients have been — their age, gender, culture, nationality, demographics, what they did for a living, average earning capacity, what you did for them and any other distinguishing factors.
If one particular group stands out when you log all this data, then it is a sure sign that your product, service or charm appeals to them. So, getting more of “them” as clients will be easier than attracting the others.
Not that you should neglect any group, but we have to start somewhere — so start with the easier pickings.
3 Where does our target group hang out? When we have determined the “who”, think about what they read, what they listen to, what they watch, where they shop, and what sports they might play.
Are they likely to have kids at school? Where might they socialise, and any other factors that might be unique to your local community. The “where” is very important to make sure your dollar is not spent in the wrong place.
4 Now the “how” comes into play. Once you have determined what you are selling, who you want to target and where to target, you now have to think about how to get your message across.
There’s the three standard medias — print, radio and TV. There is also the direct approach, there are mail drops, seminars, expos and the list goes on.
When you have done all your homework on the above points and you have quotes from all possible marketing medias, you then have to do a simple maths test.
If the marketing spend is $5999, and my usual profit margins are 10%, I will have to make $59,990 of extra work generated purely from this marketing initiative to cover costs.
Bear in mind this is just to break even, which is not what you are in business for. Then work out how many new clients you will need to cover $59,990 by looking at the average spend per client over the past 12 months.
Whatever number you come up with, you have to be confident that this marketing campaign you are planning can generate that number of leads. Bear in mind also that leads do not mean clients. Calculate your normal conversion rate from inquiry into money-spending clients.
So it’s not just about “let’s do some advertising”. If you want some help with your marketing ideas please give me a call on 021 280 8679 and let’s chat.