Most businesses look at their numbers after the big Christmas Rush while it’s quiet in January. It might be to review the year past, or to plan the year to come. That seems to me to be an act of utter Lunacy to me. It’s the kind of thing we could do in the tiger years but not in the post IMF years. Why should it be quiet in January? Just because it was quiet in the past doesn’t mean it has to be quiet again. There’s an old saying ‘If you always do what you always did you’ll always get what you always got’– only less of it now because of the changed economy.
More BusinessNow, in December is the time to review our Marketing strategy from 2013 and having reviewed it make some strategic decisions for 2014. There are three really important questions we should ask ourselves as business people – with a sub question for each one...
- What things that did I do in 2013 that worked to bring in new customers. - And what didn’t work?
- Why did they work? - or not work?
- Which ones will I do in 2014? - Why? - And Why not?
Looking at these questions forces us to really measure the results of the 2013 marketing campaign. What did we get for our money? If I spent €5,000 between all my advertising and promotional costs and I got 100 new customers then it cost me €50 per new customer. If the average spend per customer is €200 per year and the net profit on that is €65 then we only made €15 net on that first sale. I therefore need to act to cause three more things to happen all of which make that investment yield a higher return.
- I have to keep that customer for at least 3 years if he is to be profitable. [Retention]
- I have to up-sell him 20% more product (or an additional service). [Upsell]
- I need him (or her) to tell someone else to buy from us and for them to contact us. [Referral]
Let’s say you never tried to get customers to buy more stuff or service. Why not?
What would get your customers to buy more? Lower prices aren’t an option because that immediately affects your profit margin.
What could you give away to the first 30 NEW customers in 2014? What old stock do you have that you could turn into a low cost give away? Is there a little additional service you could provide that would impress the client but have a low cost impact?
THIS IS THE BOTTOM LINE: If you don’t act nothing changes. What action will you take?