The True Measure of Marketing Success

What is the true measure of marketing success?   It’s called testing and measuring. 

Most people hate it. That’s because it means ‘there is a chance, however remote, that every marketing strategy you try will not work the first time’. In other words, it’s possible you’ll spend money without seeing any returns.

But consider this – you’ve probably been testing and measuring all your business life. Remember the newspaper advertising you tried that ‘didn’t work’, and the radio spots that ‘did OK’.

That’s all testing is… Testing what works and what doesn’t…

The next step is to do it properly, here’s the five steps to successfully working out what ‘works’ and what doesn’t…

1.      Start asking people where they heard about you.

Start right NOW, immediately. If there’s one thing I stress to business owners when coaching with them, it’s this – if you don’t know what’s working and what’s not, you can’t possibly make informed decisions and you’ll never know which ads to run. You may keep running an ad that never brings a sale, and accidentally kill a good one.

Customers usually come from so many sources, it’s impossible to judge how an ad is working on sales alone. You need to find out for sure. Create a tally sheet, including the ways someone could hear about you – newspaper ads, direct mail, fliers, phone directory, referrals, walk-by traffic etc

Every time someone inquires about your business and/or buys from you, ask them this question – “By the way, can I just ask where you heard about my business’.

Make a mark on your tally sheet in the relevant column. Keep track, and ensure every member of your team does the same. At the end of 14 or 28 days, tally up and get the figures.

Without this information you can't determine how much it costs you to buy a lead or buy a customer.  Until you know this number you will continue to waste your money on poor marketing decisions

Now you can start making starter decisions…

2.      Prune, modify and increase.

The first thing to do is see what’s not working. If you ad is getting a very low response (which means the profit margin from the sales is not at least paying for the ad), kill it straight away.

Now you only have one option – improve your ad to ensure you get a great response.

There’s a couple of things you can do to make the task simpler.

First, go back over your past ads and think about how well each one worked. Pull out the best couple and see if you can pick what gave them their edge. Next, read a couple of books, or at least flick through them. Last, look at what your competitors are doing. Do they have an ad, which they can run every week? What can you learn from it?

Go through this process with each marketing piece that you are currently using… Kill, examine, modify… Kill, examine, modify… Remember – the true test of a marketing strategy is whether it pays for itself. If you run an ad and it costs you $600 and makes you $1300 in profit, it’s a good ad.

Also run through each of the strategies you know are working in depth, examining why these are producing results and the others aren’t. See if you can pick the one important attractive point about each. This in itself will teach you a massive amount about your business.

Next, think of a way to use each strategy that is working on a larger scale.  If it’s fliers, the answer is simple – drop twice as many fliers. That should bring twice the sales. If it’s an ad, run it in more papers, or increase its size.  If it’s in a phone directory, book a bigger space next time.

But whatever you do, don’t meddle – just do the same thing on a larger scale.

3.      Test and measure for another two weeks.

Measure the leads with the new revised strategies. Also compare this with how much you’re spending on marketing.

You’ll probably find you barely miss those dud strategies and the ‘larger scale’ working strategies are paying out nicely indeed.  If it’s not, return to the original size.

4.      Check your conversion.

Conversion is the number of leads that become sales… So many times when analysing a business, I discover that poor marketing is not the problem – it’s inadequate sales techniques. There are stacks of businesses that have ample leads, but no skill to make them sales.

Be honest with yourself – how many leads do you convert into sales? Is it possible to increase this ratio, even just a little? … In almost every case, it is.

You just have to give the customer a reason to buy from your business. Price is not the only reason a customer spends with your business. 

What if the salesperson at the more expensive shop actually took an interest in your needs? And what if they were that little bit friendlier? And what if they were willing to back their product with a guarantee? And what if they offered free delivery? All of these ‘what ifs’ add up, and can tip the sale your way.

5.      Consolidate.

Leave it for a month or so, just working on converting the supply of leads you have. A better conversion technique, plus more leads from bigger scale successful marketing strategies should give your business a boost.

6.      Branch out.

Remember all those marketing strategies you examined and modified? Now is the time to pull them out of the drawer, and give them a run.

Do one at a time, and track the result meticulously. Note down exactly how many leads it brings you, and how many of those turn into sales. Compare that with the marketing cost, and judge whether it has been a good strategy.

If so, add it to your list of ongoing strategies. If not, try it again – testing a different headline, medium, offer, look etc… If it doesn’t work again, give it another try…

Very soon, you’ll develop a collection of marketing strategies that work, and weed out all the costly ones. Now that’s a business success formula!

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Stop Selling!... Build relationships!

What makes a sales call a success or failure?
Are there secrets to sales success?

With today's economic conditions, there's not much "low hanging fruit" to be picked.  In today's economy, relationships count more than ever.  Only the truly professional salespeople have survived over the past few years.  

If you look at your industry, there are probably enough people still wanting to buy your product or service to keep you busy all year long.  Your challenge is, how do you increase your market share or what I like to say get your "unfair share"?

Sales are tougher to generate in a bad economy than a good one.  Nevertheless, why does it seem that some salespeople seem to do well in all types of environments?  When the economy is good, it's relatively easy for even bad salespeople to make a living.  In a good economy, often, salespeople make sales by just contacting a high volume of prospects without developing any relationships.  There is so much "low hanging fruit" out there that just about anyone can make a sale.  

There is a difference between the successful professional salesperson and everyone else.  When business is good, the majority of salespeople are just trying to get as much business as possible.  They are usually more "me" focused, than "client" focused.  Much of sales training emphasizes closing techniques.  The right sales approach involves building the client relationship, not just making the sale and moving on to the next prospect.

My TOP 2 secrets to sales success are:

1. STOP "closing sales" &  START "opening relationships" 
2. DON'T "sell" your clients, HELP them "buy"

OPEN RELATIONSHIPS... BE CLIENT-FOCUSED

Unfortunately, if you don't have a relationship it is very hard to penetrate your prospect's trust to get them to open up to you.  Just think about it.  How many sales calls do you get daily from salespeople trying to sell you something.  I can just imagine your response when the phone rings, "Oh boy, another salesperson trying to sell me something. Let me stop everything I'm doing to see if they have something I want to buy right now!"  If you are like me, you are trying to think of every excuse to get off the phone.

The biggest mistake salespeople make is trying to jump ahead in the sales process before we build any credibility.   We start asking questions before we have earned the right.  We need to earn the right to start a relationship before they'll want to engage in a relationship with us.  We can't expect that just because we've called, the prospect will want to develop a relationship with us.  Let alone want to do business with us.

So, how do the professional salespeople break through the clutter of all the other sales calls their prospects are bombarded with every day?   One strategy is to utilize current relationships.  Using current relationships, professional salespeople are able to get their prospect's attention, but most importantly, they gain some instant credibility in the mind of the prospect. Recommendations to prospects come from clients with which we have opened and built solid relationships.   

Professional salespeople are always "client" focused.   They understand that their client is thinking WIIFM or "what's in it for ME".   When you focus on opening relationships, you'll always be client-focused.

DON'T JUST SELL... HELP THEM BUY
Once you have opened the relationship and gained credibility, you can really begin to engage people.  Professional salespeople understand that people do not like to be sold, but they love to buy.  ActionCOACH's definition of a salesperson is "Professionally Helping People to Buy". 

How can you tell if you are selling someone or helping him or her buy?

The answer is quite simple.  When you meet with potential clients, are you "telling" or "asking"?  The professional salesperson's secret weapon is questions.  ASK open-ended, needs-based questions.  Find out...  

• What is the client trying to accomplish?  
• What features are most important to the client?  
• How can your product or service help the client?  

When you are asking questions, you are building the relationship!

Find out what you can do for your client and make sure he or she knows WIIFM or "what's in it for me".  By asking questions to determine needs and showing benefits, you build up each client relationship.  As you open more relationships and build each one, you gain more credibility.  As you gain more credibility, you create even more relationships.  

That's why there are two secrets to sales success.  You cannot have one without the other.  A professional salesperson must continually open new relationships and nurture those relationships by helping clients.  Follow the two secrets and your credibility in your industry is sure to increase, helping you make even more connections with new prospects.  

So, how do we break the barrier to get through to these prospects and get them to want to engage with us over everyone else trying to get a piece of their limited and precious time?  We need to first create curiosity.  Make the prospective clients want to know more by building our relationship with them.  Don't forget to ask questions and show what's in it for them.  Let's face it-- if we can't get them to want to engage with us, the chances are slim that we are going to make a sale.

What is the Price of your Customer?

Knowing the answer to this question will help you to create an unlimited marketing budget. When I ask business owners if they know where their leads are coming from they usually say, “Yes, we ask every customer where they heard about us”.  I then ask to see the data of their results.

After squirming a bit, they tell me that the information is just in their head.  Let me be clear about this!  It is impossible to accurately measure this information in your head.  To get a clear picture of what media, headline, or offer is working, it is not enough to only ask how they found out about you, but you must also record the results.  If you don’t measure it, you can’t improve it!

Marketing is all about “buying customers." By understanding and knowing the acquisition cost of a customer, you can begin to create an unlimited marketing budget and buy as many customers as you want.

So, how do you turn your marketing from an expense to an investment?  Measure and test your results.  For every dollar you spend on marketing, more should return. 

Let’s look at an example…

1. You invested $1000 on advertising 
2. You get 50 phone calls, then you are paying $20 per lead
3. If you close 20% of those leads, you have 10 new customers 
4. If your product sells for $200, you’ve just made $1000

RESULTS:

50 (Calls) x 20% (Closing %) = 10 New Customers

10 (new customers) x $200 (cost of product) = $2000 Revenue

$2000 (Revenue) - $1000 Advertising Investment = $1000 in Gross Profit

If every time you invested $1000 in advertising and, on average, you get 10 new customers and a return on your investment of $1000 profit, then you know the benefits of measuring your marketing results and creating that unlimited marketing budget. 

Understanding your customer acquisition cost will change your mindset and how you think about marketing forever.

Please let me know your thoughts in the comments section below...

Our Top 5 Rules for Successful Marketing Success

www.buyingcustomers.com 

When business owners are asked what their greatest need is, the top answer is more customers. Is this necessarily true? For many businesses more customers will not increase bottom line profits but, that is for another post.

All businesses do need new customers. Do you have an effective marketing plan in place to attract new customers? What is a successful marketing plan and how is it created? Developing an effective marketing plan is not rocket science but, does take careful consideration.

Here are our Top 5 Rules for Creating a Profitable Marketing Plan:

1. We are in the Profit Business!
   Marketing is Math. Understanding the costs of acquiring new customers is a key element to creating your marketing plan. 
2. Marketing is a Long Term Strategy
   Putting effort into understanding the current target markets of the business and which new markets to focus on will yield better results. Spend the 60% of your time on the target, 30% developing the offer, and 10% creating copy. Remember, the copy is the sizzle, the target is the steak. 
3. Marketing is the Pull, Sales is the Push
   Marketing plans are an investment and initially cost more than sales initiatives. The goal is getting customers to seek out your business. Spend 50% of your time on running the business and 50% of your time on marketing your business. 
4. Know how much is cost to buy a customer 
   Marketing is math. When you understand that marketing is all about “buying customers” you begin to change they way you look at your advertising and marketing. When you know the acquisition cost of a customer, you can begin to create an unlimited marketing budget and buy as many customers as you want.
5. Understand the Lifetime Value of Your Customers 
   Increasing share of wallet and increasing repeat transactions reduces acquisition costs. Are your customers aware of everything you offer? Are they recommending you? Are you showing appreciation to current customers to prevent them from choosing a competitor? 
6. Work the Plan 
   Make scheduled reviews part of the plan. Test and measure offers and communication vehicles. Marketing plans should be fluid. Always be open to updating the plan as your business, your customers and the and the market changes. 

I know I said 5 but when it comes to marketing you should always strive to provide more value.

To learn more about Buying Customer check out Brad Sugar's new book coming out December 4th.  www.buyingcustomers.com 

Wishing you much success,

Coach Steve



Please let me know your thoughts in the comments section below...