Our top 5 Marketing Tips for Small Business Owners can help you to demystify one of the most crucial aspects of building a successful business – First, let’s look at some misconceptions about marketing in 2018.
Many business owners who want to promote their business worry about investing in marketing for several reasons;
- They think marketing will cost too much – and look at any money that needs to be spent as an expense (not an investment in growing their business)
- They are not sure what they want to say or what offers they want to advertise
- They are not sure what their budget is
- They are not sure how to set realistic goals
Knowing where to look can help provide the answers needed plan for marketing and growth.
Reflect on who your current clients are;
Who is your perfect client? Perfect clients are profitable and don’t give you any grief. To find your perfect client ask yourself
- Do they come back to me for repeat business?
- Are they easy to provide products or service to?
- Do they refer you to others?
When you know who your perfect client is you’ll realise you need and want more like them. To get more of your perfect client you should think about some offers or incentives that will appeal to them.
Perfect clients are profitable and don’t give you any grief.
Profile your perfect client;
Now you know who your perfect client is, you will want to create a client profile or “avatar” to represent what your typical “perfect client” looks like. you can do this by finding out:
- How old they are.
- Their gender.
- Marital status/sexual orientation
- Do they hang out online, at home in front of the TV, at the pub, in the backyard reading the paper?
- What interests do they have? EG animal lovers, the beach, fashion, food lovers, coffee lover
- Education level
- How much money do they have?
Once you have identified and documented this information you will be able to create content targeted to your ideal client. It will also assist you in developing your products and incentives to appeal to them so don’t be scared that you are narrowing your options – targeted campaigns are much more effective than broad messages.
Targeted campaigns are much more effective than broad messages.
Look at your current client/customer list;
You might save yourself a whole heap of time and money if you try emailing or contacting your past perfect clients with a new offer. A past customer may have forgotten about you for the moment, but on seeing a new offer or service can become a client again.
This is often an area that gets overlooked. as most of the time and expense in marketing goes to acquiring new customers. But tapping into who you already have on your list has a much higher conversion rate and is a less expensive way to boost business quickly.
You might save yourself a whole heap of time and money if you try emailing or contacting your past perfect clients with a new offer.
Think about Scaling;
Scaling is the term used to balance your marketing and new business with your ability to provide the products or service you are offering. THIS IS EXTREMELY IMPORTANT as many businesses have fallen over by investing too much too quickly in marketing and not being able to meet the demands of the new business. Poor scaling can cause damage to your business that is difficult to bounce back from, such as;
- Bad word of mouth – caused by poor service due to overloaded staff.
- Incorrect pricing – that is resulting at a loss. If only you didn’t put an ad in every paper for 50% off until 2018! Now you have too many clients paying a discounted price and not covering your costs!
- Staff overload – your staff cannot keep up with the demands of the new business causing them too much stress and decreased performance. This will eventually lead to increased sick leave and even high staff turn over. Make sure you can hire help if you need to.
Once you have determined how you will scale your business you can set a realistic goal for how much new business to take on in a period of time. You might decide with your current resources you can increase new business by 25% in 6 months.
Poor scaling can cause damage to your business that is difficult to bounce back from.
Calculate how much you can and should invest in marketing (set a budget);
Go back to your client list and have a look at your past clients to calculate the Life Time Value (LTV) of your customers. This will help determine how much you should invest in marketing. To calculate LTV follow the below exercise.
- On Average, how many years do your old come back and use your service or purchase from you?
- In all that time, how much have they spent?
- Calculate the average of both
Your results might look like this;
Average years of a customer = 5 years
Average spend of a customer = $3500
So your LTV is = $3500 over 5 years
These figures help you to set a budget by combining your LTV with your goals and determine how much to spend on acquiring a new client. If you have a goal to increase your new business by 25% in 6 months this might mean 2 new clients per week. This means you will acquire $182,000 of revenue for your business over 5 years. I will show you the break down;
26 (6 months) x LTV $3500 x 2 (2 Clients) = $ 182,000 of revenue for your business.
If your profit margin is 35% ($63,700) then a 20% investment of this amount ($12,740) is usually a good ball park figure to budget toward your marketing in the next 6 months.
This means you have $12,740 to spend on marketing to grow by 2 clients per week. Of course this figure is much harder to calculate for new businesses and a lot of forecasting and modelling on similar businesses can be used to come up with an approximate LTV in this case. But for an established small business that wants to grow, you now have a clear goal and budget to work with.
Looking at your past clients you need to calculate the Life Time Value (LTV) of your customers.
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