You read that right a 25 year veteran marketing guy just stated he doesn’t believe in and not a fan of setting traditional marketing budgets for simply budget sake. Benchmarks, yes, especially when expressed in percentages but what if you set out a 12% marketing budget and the campaigns you implemented
work tremendously? Do you sit tight? We like to see our small business marketing clients think in terms of ROI (Return On Investment) each and every time and also what the lifetime value of a client/guest/patient means long term as well as from a referral perspective.
So perhaps[s we need to seriously consider these questions:
- If we were able to develop programs and ampaigns that when implemented would increase your business and profits of $1,000,000 each time,
what would you willing to invest to make that happen?
- Would you allocate 10%? Keep in mind that would leave you with $900,000 in gross profits.
- How about investing $200,000 which would still leave you with $800,000? $300,000 to make $700,000? Even if we invested 50% you would still
derive $500,000 in profits up front.
So perhaps the real conversation needs to be switched from, “What’s the least amount we can spend to acquire a customer?” to the far more important question, “What’s the most that we can/will spend to acquire a new customer?”
When you truly understand the true LIFETIME VALUE of your client/guest/patient ANY business owner or anyone braking into business would find the money to get them on board. It’s the vast difference between ‘Getting a Customer to Get a Sale’ and the far smarter way to think about it: ‘Making a Sale to Get a Customer’.Think about that one for a moment…
When we sincerely grasp this concept, it’s a real game changer.
Rich Sadler - - - America’s Marketing Director