3 Tips to Cut FAT Out of Your Marketing
Marketing – A business building activity you have to do in order to get your products and services in front of your ideal client. It’s a necessary evil for business growth. And it is this necessary evil that causes businesses to throw money at marketing budgets, oblivious to the results.
In fact, statistics show that 76% of all marketing activities are ineffective. That equates to billions of wasted dollars every year. So, in this article, we are going to give you three tips that you can adhere to — right now – that will help cut the waste out of your marketing.
Tip #1: Know your budget and stick to it
Do you have the slightest clue what the budget is for your marketing campaign? If your answer is “no” you have a problem. Not knowing your marketing budget is one of the quickest ways to hemorrhage money from your business. The first thing we would recommend is assigning a percentage of the business’ income to the marketing budget – 10% is a good start. From there, you can allocate money to a variety of marketing activities.
Tip #2: Know how to calculate your ROI
The ability to calculate your marketing Return on Investment (ROI) is critical. It’s the one true metric that will signal the effectiveness of your marketing campaign. Observing how much you have spent and what you got back in return helps you direct your future marketing efforts. Thus, the question becomes, where do you start in calculating your ROI?
The formula for calculating your marketing ROI is fairly simple, especially if you have a predefined marketing budget (see Tip #1). First, subtract your marketing expenses from your gross profit. Then, divide that number by your marketing expenses to determine your ROI ratio. For example, ABC Store spends $10,000 in marketing and has a gross profit of $40,000. Their ROI is calculated as follows…
Basically, for every dollar ABC Store spends in marketing, they can expect $3 in profit. As your marketing campaigns evolve this ratio is a clear indication of whether your efforts are a step in the right direction.
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Tip #3: Know where your marketing dollars are going
It’s often easiest to simply write a check to a marketing firm and trust that they are creating a marketing campaign with a variety of different activities to boost your bottom line. You might have yellow page ads, blogs, videos, direct mail, pay-per-click campaigns, or email campaigns, just to name a few. You may be left to wonder how much is being spent on each activity. With Direct Business Marketing, you won’t have to guess. We’ll provide you with a report so that you can see for yourself. It’s your money and your marketing campaign. Shouldn’t you know where that money is going?