Your Vision Statement and how vital it is

If your Business works to a marketing budget you’re doing it wrong!!

Sounds strange doesn’t it. Well it does if you take the traditional view. A view that has been perpetuated by people who developed their business skills under this condition. That’s the way most business work isn’t it?

Well yes it is and most business get it horribly wrong and I’d like to offer some pretty compelling arguments why I am right and why I believe marketing budgets do two things


1. Waste money
2. Limit your business growth


The BIG question
You opt to run a marketing campaign that you or someone else has devised for you. You have £1000 budget and you make a start. It costs you £100 per week to run an ad so you place the ad for the first 3 weeks.

After week 1 you have no responses. No matter you have £900 left of the budget.
After week 2 you have no responses. Still £800 left.
After week 3 you have 2 responses. Right lets book the remaining 7 week and spend the budget. After all that’s what budgets are for right.

At the end of ten weeks you still only have 5 responses and 3 of them are a waste so you ended up with 2 enquiries after spending £1000. Well you had a budget right? The two enquiries result in one sale and net you £50 in profits.

Overall you ended up loosing £950 in total. That demonstrates point 1 above. Now lets look at point 2


Let me offer the other side of this story
As before, you have £1000 to spend on an ad campaign at £100 per week. Off you go and book the first 3 weeks

After week 1 you have 10 responses. Great!.
After week 2 you have 30 responses. Wow
After week 3 you have 50 responses. Right lets book the remaining 7 week and spend the budget. After all that’s what budgets are for right.

After week ten you have 200 responses of which 100 turn into sales netting you £5000 in profits. Fantastic. Lets do that again? Sorry no budget left!!

A simple scenario to drive the point home

If we installed a button on your desk and charged you £10 to push it and each time you pushed it you lost £100 would you have a budget to allow you to push it? If you did have a budget would you keep pushing it until the budget was gone?

What about if, when you pushed the button you made £100. Would you stop pushing it once your button pushing budget was spent.

Hopefully you are beginning to see the futility of a marketing budget.

Marketing isn’t just something that has to be done. It is the life blood of any business and you must find a strategy that works for you and delivers quantifiable results that deliver profit down to the bottom line.

Now by that I don’t necessarily mean that the marketing campaign must directly lead to orders which bring in profits over and above the costs of that campaign. Its more complex than that at times. You see a customer can be won over by a campaign and make a small purchase and then go on to be a repeat customer for years contributing profits. It is this 'Lifetime Value’ that you need to understand.

If you knew that, on average, customers stay with you for 5 years and in that time are worth £1000 in profits to your business how much would you be willing to spend on acquiring them?

Would you give a £100 voucher to anyone recommending a friend?

Just something to think about. We cover this topic in much greater detail for members and learn some very powerful strategies to generate more business and more profits.
Find out how. Become a member of The Business Builder Club.com

By Steve Wardle - Founder of TheBusinessBuilderClub.com
http://www.TheBusinessBuilderClub.com

Wed 17th Feb 2011