So many business owners are spending tons of money every month on advertising and marketing, and a lot of it is being wasted!
The key to spending less on marketing and growing your sales is to fix your internal processes in order to increase your conversion rate and marketing effectiveness!
Within your business, there are several important processes that you must create (and enforce) to ensure that the leads coming from your marketing and advertising are turned into clients.
#1: Track as Much Data as Possible on Your Leads, Not Just Customers
Many people make the mistake of only capturing information on customers or people who are already doing business with them, when they also need to capture information on leads.
I cannot stress this enough, if you are not tracking information on leads and storing the data in an organized way (it can be as simple as a spreadsheet or more elaborate with a CRM), you are missing out on huge opportunities to increase your conversion rate, and therefore your sales.
#2: Be as Detailed as Possible When Collecting Information on Your Customers
The more we know about our customers (especially the ideal ones) the more power we have to do targeted marketing in the future.
As a bare minimum, we need to collect their name, email address, phone number, age, and physical address. If we can go even further and find out their media consumption habits, what they like to do for fun, the reason they buy from us, or other buying preferences, do it!
Information is power, because you can use all of it to make more targeted (and way more effective) marketing choices in the future.
#3: Create a Follow-Up Procedure
Because you are intelligently tracking your leads (the first point in this list), you will be able to follow up with them! And since 84% of sales are done between the fifth and 12th follow up, this is absolutely imperative!
You must create a follow-up procedure that includes following up at least five times (unless tell you they’re not interested at any stage, of course) or you will be leaving up to 84% of sales on the table. That is so much money! And since most businesses don’t follow-up, you can really edge out your competition here.
You can do the follow-ups in a variety of ways, in person, on the phone, email, text, send a video, etc., but do it in a way that you think your clients prefer.
Think of follow-up as a service, not an annoyance, because we are all so busy that it is convenient for us to be reminded. And since you’re only selling to customers who really need what you’re selling, following up is truly a service, in helping them fulfill a need.
#4: Calculate ROI, CPC, CPL, and Conversion Rate
These are important numbers to understand which types of advertising and follow-up are working for you.
Use all of these numbers to make advertising decisions, not just one, as it could skew your effectiveness evaluation.
When you do these calculations, ensure to use the same time period for the spend on each source (Facebook, signs, radio, etc.) as the time period in which the leads and clients came in from that source.
ROI = Return On Investment
Take your gross profit earned from clients who came from a source (Facebook) and divide it by the amount spent on that source. So if you earned $10,000 and spent $5,0000, you have a 200% ROI.
CPC = Cost Per Customer
This one is simple. Divide the amount you spent on the source (Facebook) by the number of customers who came to you from that source.
CPL = Cost Per Lead
Same as CPC, this is very simple. Divide the amount you spent on the source (Facebook) by the number of leads who came to you from it.
This is calculated by the number of customers divided by total number of leads from each source.
So if you brought in 100 leads from Facebook, but only 10 converted into customers, your conversion rate is 10%.
As you can see, you might have a nice low CPL, or a great ROI, but the conversion rate could be low. This means we either need to fix the message or the lead handling process to increase the conversion rate.
If you look at all of these numbers, you will have the best tools to analyze and make better marketing decisions. This translates to more customers and less spending on marketing!
#5: Systematically Assess Your Lead Conversion Processes
Make sure lead conversion is someone’s KPI and report on it monthly.
Make sure you have mapped out exactly how you want leads handled in a procedure.
Make sure everyone who handles leads is well trained and coached on this!
Put this in your calendar and assess it monthly. And when you review, make sure you are armed with your CPC, CPL, ROI, and conversion rate numbers. You can take those numbers to your team and improve your processes with even better accuracy!
No one wants to waste money on marketing, but almost everyone does. Follow these steps to increase your marketing effectiveness and stop wasting money today!
And if you want a great tool to identify how much you should spend when it comes to a small business's marketing budget, use our marketing calculator!