The Sign Connection Is Your Marketing Resulting in Profitable Business? By Heather Davis When analyzing business, an owner will typically look at two ways to increase profitability: reduce expenses and increase revenues. Sounds easy, right? Well, it is a bit more complex than just cutting costs and selling more. You have to be strategic when looking at eliminating expenses. For instance, if you want to increase revenues, cutting your marketing expenses is really not going to help you achieve your goals. However, you may want to analyze each of your marketing investments and the resulting product sales and clients you are attracting as a result of your marketing efforts. Here are a few tips to ensure your marketing is delivering profitable business. Tracking Your Sales To understand which marketing tactics are generating profitable revenue, track customer origins, order origins and clients’ industries. The best way to gather this information? Ask all new customers how they heard about you and repeat customers what made them come back. When entering the data, remember that a customer origin is the marketing channel that first attracted the client. This can be pay-per-click, website, direct mail, or print advertising, among others, but it can never be a repeat customer. The order origin is tracked as the tactic that resulted in a customer returning. An order origin can be repeat, email, website, direct sales, etc. The customer origin will provide products. Once you identify which client segments are purchasing products, you will then want to ascertain which marketing tactics have successfully generated sales within these target markets. This is where that sales tracking mentioned earlier comes in handy! Test on Current Customers Now that you understand what products are generating profitable revenues and which client segments are consistent buyers of these products, it’s time to sell more of these products, and where better to start than with your current clients? It is a well-known fact that it is much easier and less expensive to generate more revenue from your existing client base than acquiring new clients. Many times it only takes a phone call and an hour or so of your time to convince your current clients to try new products, resulting in increases in profitable revenue without increased advertising expenses. Your first step to increasing existing client profitable revenue is to identify clients within the segments you defined who are you better insight into the true value of your marketing programs by providing the lifetime value of the client. Many times marketing programs are evaluated based on initial order value and not new client value. Take direct mail for instance. You participate in a six month campaign that generates one sale per month of $500 or $3,000 in revenue. If you were to analyze just based on this revenue, you would probably feel this was not a successful program. Now what if you tracked the customer origin and the value of the clients for the first year? The direct mail program initially contributed $3,000 worth of sales but also six new clients. Within that first year, each of those clients came back and purchased an additional $1,000 worth of product. That direct mail campaign generated six clients with a first year purchase value of $9,000. Now that direct mail campaign is looking a bit more attractive! Create Profitable Customer Segments One way to increase profitability is to increase revenue. A better way to increase profitability is to increase your profitable revenue. If you sell more products with a higher profit margin, you will naturally decrease cost of goods sold and increase revenues. But in order to sell more profitable products, you need to pinpoint what products have the highest profit margin and which clients are buying those 26 Wide-Format Imaging | July 2015 MyPRINTResource.com
Wide-Format Imaging July 2015
To see the actual publication please follow the link above