Marketing can be something of a mystery for many small business owners. More often than not, it’s an ad hoc initiative carried out whenever you’re obviously struggling for new business, as opposed to a reliable, systematized revenue engine that safeguards your financial future.
Many smaller firms are stuck in the mindset of considering marketing as an expense, rather than an investment. This is a potentially tricky trap to fall into as it artificially limits your opportunities for future growth and lures you into a defensive mindset.
With a well-defined marketing strategy, you should be cheerfully looking forward to spending as much money as possible because you’re confident that the expected return will be significant. Let’s look at three basic ways you can start changing your approach to consider marketing as an essential investment rather than a risky expense.
- Expect A Return
Our first step is a deceptively simple mental shift that both primes the pump for future growth and safeguards you against charlatans. Put simply, you need to internalise the fact that the purpose of marketing campaigns is to make money.
Every marketing initiative, particularly for small businesses, should be defined by measurable returns – not by nebulous concepts such as “brand building” or “capturing mindshare”.
- Start Thinking In Terms Of Campaigns
Now that you’re thinking of marketing as a source of profits rather than a money pit, it’s time to put your efforts on a more professional footing. No matter how small it is, every marketing initiative should be considered as a campaign.
What makes a campaign different? Here are the main characteristics:
▪Campaigns have defined start and end points.
▪Campaigns have defined budgets.
▪Campaigns have defined expectations in terms of return.
▪Campaigns are carefully tracked and documented.
▪Campaign results can be analysed and compared to other campaigns over time.
The real world being what it is, you won’t always hit your targets on every campaign – but you’re at least operating in a professional framework that gives you the best chance of getting more out than you put in. You’re dealing with facts, not hopes and dreams.
- Know Your Average Customer Lifetime Value
In early-stage small businesses, it’s admittedly not always clear what your average customer lifetime value is. Revenue might fluctuate wildly per client, for example. Or you might not have been in business long enough to gauge how much repeat trade you can expect per customer. Nevertheless, you need to start getting a feel for how much each new customer is worth over the long haul as quickly as possible.
Always remember: it’s extremely hard to judge the overall return on marketing efforts unless you know this number.
Even a rough estimate of what each customer is truly worth lets you know how much you can really afford to spend, and gives you the ability to objectively assess the success or failure of individual campaigns. If you’re not already, start running the numbers and commit to tracking this value over time.
By considering marketing as an investment rather than an occasional roll of the dice, you unlock a scalable source of growth that will serve you well for years to come. The simple steps we’ve outlined above are a great way of easing into a transformational process that can take your small business to the next level in record time. Get started today!