Are you paying for customers?

If you haven’t, you should be…

That’s why you buy small business advertising - to “purchase” customers…

Then they turn around and pay you more…

So it counts as an investment…

We all agree on that, so how much are you really spending on your customers?

And what have you gained on your investment, or ROI (Return on Investment)?

If you shrugged at any of these questions, then no worries, you’re not alone…

Most small business owners can’t answer these questions with hard data-based answers…

And guess what, they’ve still got a business…

So it’s probably not too crucial to small businesses, right?

It depends, how much do you want to gain from your business?

Some large and medium businesses pay more to their mid-level management than a small business owner makes.

And work longer hours…

Some even have made it up into 6-figure net incomes…

Even less have achieved true wealth…

I consider true wealth as financial and business success…

Because even if you love what you do – why work 80 hours for 40 hour pay??

Didn’t we all start businesses to enrich our lives??

If so, then maybe we should rethink how we spend money on advertising…

Learn your costs for each customer, because if you know that they could double your profits… how much more would you pay out?

Well, that’s the name of the game in small biz advertising…

A bird in the hand is worth two in the bush…

Rinse and repeat… and repeat… and repeat…

Until it stops working… If an ad works, stay with it until it doesn’t anymore… All the while tracking and measuring the profit it brings in…

But let’s get back on track…

We have questions to answer…

Like how’s your ROI compared to your client acquisition costs??

There’s a couple ways to track your ROI…

First is your break even point…

You’ll end up with issues in your cash flow if you don’t find this out…

But if you learn where you break even, and within 7 days get that ROI of 1, then you can start to plan ahead…

If you break even at 7 weeks – then you need to plan differently…

You understand…

So, once you know your client-getting cost and your ROI at various points in time, let’s talk about how to improve your ROI…

Improving your ROI on your marketing takes two steps…

Lowering costs or increasing income… those are the two step towards growing your businesses profits…

Lower your client acquisition costs by finding better deals on advertising, or trying different and cheaper forms of advertising…

That’s one step towards improving your ROI… but one you should take lightly…

Because at some point along lowering your front end costs, you’re going to reach zero…

But who cares if you’re gaining an ROI of 1,000% on every dollar?

Well what matters to us as small business owners, is what do I get to keep at the end of the day?

All this boils down to is this - don’t focus on your ROI and throw out your worry about net profit…

By going the second way towards improving your ROI, you’ll succeed in two areas - a better ROI, and improved net profit…

Increasing income from every new customer…

The second method has two ways:

# Increase the transaction size for each client
# Increase the frequency of client purchases

You can increase the transaction size by raising prices….selling add-ons at the point of sale….upsells to premium versions of your product/service…. or cross-sells of items only loosely associated with the original purchase…

You can increase the frequency of purchases by adding continuity to your business (subscriptions, membership, etc.), creating new products and services to pitch to existing clients, or offering another company’s product or service through joint ventures…

Using just one of these steps within the next month you’ll see an immediate increase in profits…

Remember, the difference between success being a simple dream or a reality is all about implementation of good ideas…

Most falling or soon to fail businesses are ran by owners that have the dream, but no will to execute it…

Don’t be that business owner…

Take what you are learning here and implement it – then share your success story with me so I can publish it on the blog…

As always, feel free to leave any comments or questions…

Here’s to always improving small business advertising!!!

Tags

Marketing and Advertising