I spoke yesterday about two common mistakes I have been seing a lot – including going cheap on accounting and the books and neglecting existing customers.
“Smart” Marketing
Another common mistake (and one I’ve made myself more than I care to admit) has to do with “smart marketing”.
Investing in marketing and sticking with it to get results but not just any type of marketing. Marketing where you can measure performance, to see if you’re using the right messaging at the right time and through the right channels.
Here is where you can learn a lot from old-school direct response marketers, who had to know how to market when every communication was done with physical stamps and envelopes. They had to get it right or else they would’ve wasted a lot of money getting it wrong.
Niche down and know your audience.
I’ve lost count of how many times a business owner has told me, in so many words, that their target market is “everyone” or they’re taking the machine gun approach.
“My target market is x, y, and z, plus the neighbor’s cat and their 12 cousins, and everyone in the city and this part of the country.” In fact anyone who has ever lived on the planet earth.”
When you try to be something for everyone you end up being nothing to anyone.
So know your audience and speak to them.
And invest and measure the metrics.
I’m amazed at how many companies have no idea what they are spending on customer acquisition or can give a half accurate answer to that question.
If you do that, you might as well go to Vegas and spend the marketing money on the slot machines. You’ll be just as much in the dark but at least you’ll get free cocktails to enjoy.
Knowing the metrics, start with the intention of paying to breakeven or even a slight loss to get customers into the door, and then make profits by providing them with exceptional services and turning them into repeat buyers.
For example, if I know I can get a customer into my program and they will on average spend $500 over the next year, and I have a lead magnet that costs $10.. I’ll price the initial transaction at $10, so I can get as many customers into the door. I’m not worried about making a profit on the first transaction – because I’m acquiring this customer effectively for free. And once he is in the program, I can then make $490 in 12 months with minimal to no further marketing cost.
A 49:1 ROI is pretty good in my opinion. 😊
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