Guest Blog by Jon Davies of MJF Accountancy
I’ve lost count of the times that people have said to me that they’re looking to reduce costs and that they’re cutting their marketing spend. You see, I’m an accountant, so they think that’s what I want to hear.
But I don’t. I think the opposite. To me, marketing is an investment, not a cost, and is essential to any business that wants to grow and be successful. The problem is that bad marketing is a cost, and that most businesses just don’t know whether their marketing is good or bad.
That’s why it’s essential to measure the results of all of your marketing. By tracking these results, you can see what’s working and what isn’t. You can then stop the bad stuff (“the costs”) and do more of the good (“the investments”).
So how do you do this?
At its simplest, you just need to keep a record of three numbers for every piece of marketing you do. That could be a flyer, your website, a networking group, an advert, or any other marketing activity. So what are the three numbers?
- Cost of the marketing activity – what have you spent? For example, a mailshot might include the design cost, printing and postage. You might also include the cost of your own time but don’t worry if you can’t put a price on that right now.
- Income brought in – the sales that come directly from this piece of marketing.
- Profit brought in – sales are good, but what’s the profit? If you can’t work it out exactly, use you gross profit percentage multiplied by the sales figure above.
And with those three figures, you can decide whether each piece of marketing has made or lost money……and whether it’s worth doing again.
But how do you know where the sales came from?
There’s a famous saying that “Half the money I spend on advertising is wasted; the trouble is, I don’t know which half”. And that was true when John Wanamaker said it over 100 years ago. But it isn’t now. Everything is trackable and measurable…..if you know how, and put a bit of effort in.
Some sources are easy to track – for example, a new customer might tell you that one of your current customers recommended you – but others can be a bit trickier. Did that new customer come from the flyer, or the website, or the advert, etc?
So here are some ideas for tracking the exact source of income:
- The Internet – without getting too technical, there are lots of ways that the internet can help. For example, you can get different sources to send customers to different webpages where they can order from you, e.g. the flyer sends them to www.yourname.co.uk/flyer so you know it came from the flyer. Google Ads and Google Analytics are also much easier to master than you might think.
- Tracking Numbers – did you know that, for a few pounds each month, you can get a lot of different local phone numbers (ie all 0151, etc) that all ring through to your main office number? You can then put different phone numbers on your website, advert, business card, etc. At the end of the month, you get a statement that says exactly where each phone call came from, so you know exactly where those sales came from. Check out Invoco for tracking numbers and give the code KOOGAR to receive 3 months for FREE!
- “Ask for Jon” – a really simple but effective method is to put “Ask for Jon/Amanda/Sarah” on each piece of marketing, using a different name for each. Of course, there is no “Jon” -they’re always “not in the office right now, but can I help with that?” – but you now know exactly where the lead came from!
So, using the steps above, you can track the success of all of your marketing.
It’s great to try different things, but you need to measure and stop the costs, so you can use your cash for investments.
And, as an accountant, that’s what I really want to hear from all of my clients.