If you are like most small business owners, you simply want to get more customers from your marketing and advertising campaigns. Most people believe that new customers and more revenue mean more profits. And for the most part, that is a good rule of thumb. However, certain marketing campaigns can cause your business to bleed money if you are not careful.
We see it all the time. A plumber is trying to increase call volume, so he starts to put money into Google search ads. The ads begin working and his phone starts ringing. But, that plumber is not careful and doesn’t realize that he is paying $100/call and more than $400/customer. At the end of the day, after the rest of the bills are paid, he is losing money on those jobs!
What’s the point? A great marketing person will be able to help you make a financial plan for all of your marketing campaigns. We are not saying all Google search ads are unprofitable. That’s far from the case. In fact, we manage many profitable campaigns for our clients. We are simply stating that if you do not pay attention to your costs, you could lose your shirt! Let’s break it down…
Making a Plan
First, you need to make a plan for any marketing or advertising campaign. Decide what numbers you are going to track (costs per call, costs per click, etc.) and make some assumptions as to how many customers you will convert. It is always best to have some sort of projection in terms of what your marketing campaign will return for you.
Decide what numbers you will track
Decide when you will track these numbers
Put it down on paper (or Excel)
Pro Tip: Be conservative in your assumptions. Do not get aggressive in terms of how many customers you will convert. If the numbers look good even with conservative assumptions, you allow room for error to still be profitable.
Checking Along The Way
Next, you will need to continually check your numbers along to way to see how close you are coming to your projections. It’s not healthy to be over-attentive to your campaigns. You need to give them time to work. But, do not ignore them. Check in every week or so to monitor your progress.
Pro Tip: Do not make any sudden changes to your campaign within the first 30-days. It’s important to allow your plan to unfold and come to fruition. Good campaigns take time. Making changes re-sets the clock.
Correcting & Revamping
After you have given your campaign enough time to produce reliable data, it’s time to make adjustments. Ask yourself what’s working and what’s not. Where are you close to your original estimation? What is surprising you? At this time, you shouldn’t have to completely go back to the drawing board and start over, but you can make slight adjustments to improve your campaign.
Pro Tip: Take budget away from campaigns that are not producing results and reallocate it to campaigns that are working. This is how you increase your returns without increasing your budget.
Need Help Making a Plan?
We are marketing people who understand how to read a financial statement. In fact, we have many pre-built templates to create a financial projection for you. Book a free consultation with us below to learn more…