I put a lot of effort into going beyond being a simple tax/accounting advisor for my Louisville clients, and I’m grateful to those who send back comments, who forward these on to their associates and, of course, for the many referrals that my clients and contacts have been sending our way the past few months.
People switch accountants for lots of different reasons.
One of the big reasons, I believe, that people become frustrated with their existing accounting solution is that business owners really need to be operating from a place of clarity when it comes to the data and the numbers in their business. Far too many Louisville business owners, however, don’t have the luxury of this kind of data.
And when it comes to marketing, you have to be looking at these numbers in order to see what works. Certainly there are “soft” marketing spends (such as those focused on retention, referrals or relationships with important contacts). But when it comes to new client acquisition, it’s critically important to have at least some basic clarity.
You might remember that I recently wrote about using “profit first” principles to operate your business more effectively. It’s really about how you’re managing and prioritizing your cash flow, and doesn’t necessarily touch how you’re bringing IN that cash.
Which is what I’d like to talk about today.
Evaluating Your Louisville Company’s Marketing ROI
“The sweetest two words are ‘next time.’ The sourest word is ‘if.'” -Chi Chi Rodriguez
One of the big problems with “branded” style advertising, is that you simply cannot know whether your marketing is really working or not. After all … if you’re “getting your name out” (as the ad reps tell you), how do you know if your “name” is pulling in new clients?
It’s a classic strategy by which ad reps get you to purchase more advertising from them: “We just need to go a few more months, so you can get your name out more.”
Well, when I’ve worked with advertising agencies, we enjoyed the power position with our ad reps. Why? Because we knew our numbers.
We could attach dollars and cents to the ROI from our specific ads, and we used that info to make marketing decisions every season. And it’s a MAJOR missed step for many local businesses.
So how do you do it?
Simple. First, you commit yourself to creating marketing pieces with a direct call to action. That means giving the reader (or viewer, etc.) an actual reason for responding, with a good offer, a deadline or a new product or service to try.
Then, attach an internal “code” to this piece. If it’s print, ask them to bring it to the store or office, and make sure your staff is equipped to enter that particular code when they do the transaction. If it’s broadcast media, you can also get a dedicated URL or 800 number (or local number) to track which calls come in specifically in response to the ad.
This is also, of course, true for online marketing — but tracking is much easier there. But I encourage you to carry things out to revenue, not just hits and clicks.
And, of course, you should be tracking your incoming phone calls … but that’s a note for another day.
Then, once you’ve got this information, you look at how much you spent on the ad and can create a “quick and dirty” marketing ROI analysis for ALL your advertising.
We would evaluate the effectiveness of an ad this way: if we break even, we’re alright with that (repeat business, referrals, etc.) — I see them as “free” clients. Anything above 1-1 ROI is gravy.
Many business owners are leery of breaking even on a promotion … but they’re missing the point. It’s not about hitting all home runs. Hit singles, doubles, triples (with a “walk” or two, thrown in) … and the combined effect does, in fact, become a business home run.
Take that to home plate … and to the bank.
I’m just grateful for our chance to serve you and your business — and we are dedicated to every part of its success, even its marketing and sales.
Feel free to forward this article to a business associate or client you know who could benefit from our assistance. While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for families and business owners.
Roberts CPA Group