Do you make these three common, but dangerous business mistakes? – Part 2

My Blog Originally Appeared in and is Reprinted from University of Utah Continuing Education Blog

This is the second part of a three part series by Maggie Curran, Instructor for Create a Small Business Marketing Plan That Works.  Her workshop will be held on January 31, 2015

I’VE ONLY GOT $200 A MONTH FOR MARKETING BECAUSE I SPENT ALL MY MONEY ON OTHER THINGS 

Are you a start-up/new business?

I can’t tell you the number of times I’ve heard, “I spent all my money on rent and furniture. I don’t have any money for marketing.”

Really?


Where are your customers going to come from? How will they know you’re on the 2nd floor of a random office building or in the back of a strip mall, for example?

Or that you’re selling your jewelry online or that you’re going to be a vendor at an art show in San Antonio?

Before you start, realize that, psychologically, it may make your business feel more real to you to spend money on “things,” but you should prioritize your expenses ruthlessly before you spend a dime. Focus on the things that will showcase you to your customers.

The need for a logo, business cards, web presence, plus all the other marketing collateral materials will still be greater than the need for office supplies.  Be realistic and think through what kind of customer you’re looking for and how you’re going to get them to contact you.

(I love this video. It goes really well with the next section.)

Here’s another one I hear all the time: “My marketing budget is $X per month and that’s all I’m going to pay.” 

This is always an unrealistic amount that has nothing to do with the business niche. Take a look at the video above and it may just open your eyes to just how wrong this thinking is.

Something I always do with clients and in my classes are competitor analyses.

Without knowing your competitive marketplace you’re blindly making decisions. I guarantee you’ll end up wasting that small marketing budget and get nothing in return, and you’ll be convinced that marketing doesn’t work, but you’d be wrong.

Let’s say that on average a new customer is worth $6,000. I’m thinking of a business development client of mine in Florida who manufactures and installs high impact hurricane windows and doors.  A whole house of these windows & doors will generate tens of thousands of dollars in revenue for them, but, on average, 1 new customer is worth about $6,000.

When we first met I immediately asked them who their closest competitors were, as well as who the top companies were in the high impact hurricane window niche.

Then, using my secret tools, I showed them exactly how much each competitor was spending per month just on online advertising. I showed them the competition's ads, which ones were actually bringing them leads, and how many of them weren't bringing anything at all.

They were floored. They thought they were being conservative and safe by spending a measly $250 per month - but over three years that was $9,000!!!

And not one new customer to show for it!

When they contacted me, they were worried they’d have to close their doors unless they started generating more leads for their salesmen.

Before I came along they maybe got one lead per month from their website, and with high competition in that industry, they weren’t able to generate any new business online.

All their business came from networking, which takes a lot of time and is limited to where you can be in person, and whether the people you meet actually need your product or service at that exact time.

Remember that 90% of people who need what you’re selling will search for it online FIRST. Don’t you do a Google search when you’re looking to buy? Of course, you do.

And how’s my client doing now? During the current off-season, they get about 6 leads per week from their website. These are people who are looking to buy new hurricane windows and doors. And this doesn't include the vast majority of people who go to the website, then pick up the phone to call immediately for information. So, they're getting a total of about 15 leads per week from the marketing activities. If they only close one of those 15 leads per week, which is a very low rate, they make a minimum of $312,000 per year.

Thankfully, they’ve got a great salesman/closer, who gets the contracts from those leads I generate.

While everything was being set up online, I helped them restructure their sales department functions, interview new hires and strategize about how to most profitably divvy up the leads.

Not surprisingly, they reached their sales goals for 2014, which was to make a profit for the first time in 3 years. Why is it not surprising? Because we analyzed and discussed everything to make sure all actions & decisions were moving them toward profitability.

So, change your thinking about how to define your marketing budget. 

Figure out how much one new customer per month is worth to you. If your product or service is inexpensive how much are 100+ new customers per month are worth to you?

Would you spend $1,000 per month to get 1 new customer per month who spends $6,000 on average?

Who wouldn't?

How about spending $3,000 to get a $6,000 sale? $2,000 to get a $6,000 sale?

Wouldn't you put out $1 to get $2 back?

That’s how to think in order to determine a marketing budget that will actually work for you!

If you’ve got a solid website and are providing potential customers with what they need to feel confident enough to make contact, then you’re going to get leads (potential customers).

After that it’s up to you or your sales team to close the deal.

Maggie Curran is a seasoned business development & strategic marketing professional with international experience. She's lectured on marketing at the University of Miami and Florida International University, among many other private workshops and classes online and in person. She's known for being instrumental in making retired baseball great Sammy Sosa, the "Social Media King" in 2013/14.

She is teaching the one day seminar on Saturday, January 31. Register here Create a Small Business Marketing Plan That Works

MaggieCurran.com