Marketing Strategies
"How to
really know if your marketing strategies are profitable"
by
Peter Geisheker,
CEO, The Geisheker Group
Marketing
Company (920) 471-1638
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As
a marketing consultant and owner of a
marketing firm, a
big mistake I see businesses make is they do not take
into consideration the value of repeat sales when they
review if their marketing strategies are profitable.
When determining if your
marketing is profitable, you need to look at
marketing and advertising as a long-term investment,
just like buying stocks, real estate, or mutual funds.
When evaluating your marketing you need to take into consideration
repeat sales from each new customer your marketing
produces. Nearly all businesses earn the majority of
their sales and profits on repeat sales, NOT first time
sales. Understanding this concept is one of the secrets
to building a successful business. |
For example, let’s
say you run a small quarter page advertisement in your local shopper coupon
magazine. This small ad costs you $300. From that single ad you
attract three new customers who each buy $50 worth of your
merchandise. From that information you would think that you had
a loss of $100 on that ad because you paid $300 for it but you
only generated $150 in sales. But let’s look at the long-term
effect of those three new customers.
Let’s say that each of those three new customers purchases an
additional $250 of merchandise from you over the next 11-months.
When you take that into consideration, your $300 ad has now
generated $900 in sales. And, what if each of those three
customers purchases an additional $300 of merchandise from you
the following year? Now, your original $300 ad has generated
$1,800 in sales over a 24-month period. To put that into
perspective, if you bought $300 worth of mutual funds and in
2-years your $300 investment was worth $1,800, you would be
jumping for joy! That is why you need to view the profitability
of your advertising on a long-term scale, not on a short-term
1-2 month scale. Advertising is an investment to generate
long-term customers and repeat sales. Your focus as a business
owner must always be on generating faithful long-term customers,
NOT one-time sales.
Let’s broaden the picture even more. Let’s say one of your three
new customers loved your merchandise (or service) so much that she told two
of her friends about you, and her two friends each becomes a
long-term customer of your business. And, what if those two
friends each buys a few hundred dollars worth of merchandise
from you over the next couple of years? Do you now see the
tremendous long-term value of that $300 ad you placed?
Now that you have a better understanding of marketing and
advertising as an
investment, it is vitally important that you track the source of
every new customer (i.e., did they find you in the yellow pages,
direct mail, radio, Internet, word of mouth, etc.). Whenever you talk to a new
customer you must ask the customer, “How did you hear about us?”
Then, you need to track the source of that customer in a
spreadsheet or a CRM system and track how many sales that
customer makes over time. This is the only way you can truly
determine if a marketing strategy is working. Yes, this takes
time but it is worth it. And, a good CRM software application
can make this tracking very easy.
In summary, before you throw in the towel on your marketing
strategies because they are not immediately generating a profit,
you must first understand that value of a new customer over
time. Stop looking at marketing as a short term expense and
start viewing marketing as what it really is, a long-term
investment to the success of your business.
You may reprint
this article for free as long as you include a link to
http://www.marketing-consulting-company.com and the author, content and links remain
unchanged.
If you need help
creating a marketing program to determine the precise strategies
you should be using to market your company, or you need help
developing marketing materials such as a brochure, a press
release, sales copy for your website, a display ad, or a sales
letter for a direct mail piece, please call (920) 471-1638 or
email us. We would love to help you improve your marketing.
To view all of the different marketing services we provide,
please visit
http://www.marketing-consulting-company.com.
To Your Success!
Peter Geisheker
President and CEO
The
Geisheker Group Marketing Company
"Innovative Marketing for Innovative Companies"
(920) 471-1638
Fax: (920) 491-9090
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