Imagine for a moment that you own a store that sells socks.
If the black socks are selling well, but nobody wants your red socks, what would you do?
You would buy more black socks, and forget about the red socks.
As a general rule, leads generation – and marketing – works exactly the same way.
You put more money in the campaigns that are cashing in and stop investing in the campaigns that aren’t working.
Easy peasy, right?
However, too few companies do this!
Do you know your numbers?
- Which of your products works the best?
- Which of your sources of leads brings the best ROI?
- Which are your most productive sales funnels?
If you don’t know the answer to any of these questions, then this article applies to you.
Imagine for a moment that you can generate at least as much money every day as you put into advertising…You can reinvest it again and again!
This is the key for an infinite marketing budget and exponential growth.
It’s not always easy to find a simple and effective method to understand where our money goes in advertising and what it really brings us in return.
Marketing lingo is like that of lawyers or doctors: it’s an indecipherable language to the uninitiated …just like in this Inconnus sketch (watch it again and again)… (this may not work for an English audience)
There are some key metrics you must definitely know, otherwise it is impossible to measure your return on investment.
Once you have accurate knowledge of your investments, your costs per lead and your return per lead over 1 week, 1 month, 3 months, 6 months and 1 year, you will have cracked the code to exponential growth.
If a contact generates an average of €2 in 1 month with Google Adwords, you will need to invest a maximum of €2 every month in order to grow.
Once you have understood this, you have cracked the code to an infinite marketing budget and to exponential growth!
Growth vs. Profit
Some will go as far as investing more than this number to outgrow their competitors.
“Your margin is my opportunity” – Jeff Bezos
The idea behind Jeff Bezos’ quote is to attract a maximum number of customers, even if it means losing money over the short-term to focus on long-term growth.
This decision depends on the stage of your business and what your objectives are…
Will you choose profit or growth?
To know how effective your leads generation system is, ask yourself the right questions.
- What are your sales per customer? Write down your sales per customer for each source of contact… Over 1 week, 1 month and 1 year. TOTAL OF THIS OVER THE DURATION / NUMBER OF CUSTOMERS = SALES AT 7 DAYS, 1 MONTH, 1 YEAR
- What are your sales per contact? Write down your sales per customer for each source of contact… Over 1 week, 1 month and 1 year. TOTAL OF THIS OVER THE DURATION / NUMBER OF CONTACTS = THIS OVER 7 DAYS, 1 MONTH, 1 YEAR
- What is your ideal cost per contact? The cost per contact is the percentage of your value per contact divided by the duration you want (7 days, 1 month, 3 months or even 6 months) for which you are ready to invest (25%, 50%, 100%, 125%)