Article Categories

»	Arts & Entertainment
»	Automotive
»	Business
»	Careers & Jobs
»	Education & Reference
»	Finance
»	Food & Drink
»	Health & Fitness
»	Home & Family
»	Internet & Online Businesses
»	Miscellaneous
»	Self Improvement
»	Shopping
»	Society & News
»	Sports & Recreation
»	Technology
»	Travel & Leisure
»	Writing & Speaking

Reprint Article Code

Category: Articles » Business » Marketing & Promotion » Article » Article Code

Assign marketing budgets that break the bank!

That's right, break the bank with profit. Profit is achieved by maximising your margin on increased sales. Spending money on marketing wisely will mean your costs can be contained, while sales revenues increase. But how do you do that? This article discusses why measurement of everything, marketing that you do, is so vital. Let's start off with some basic principles. You need to sit down and answer the following questions, if you really want to create a marketing budget that maximizes your profit. What is your average annual turnover? ......._______A How many customers do you have?................______B o ... read more

Article Title:

Article Body:

That's right, break the bank with profit. Profit is achieved by maximising your margin on increased sales. Spending money on marketing wisely will mean your costs can be contained, while sales revenues increase. But how do you do that? This article discusses why measurement of everything, marketing that you do, is so vital.

Let's start off with some basic principles. You need to sit down and answer the following questions, if you really want to create a marketing budget that maximizes your profit.

<ul>
What is your average annual turnover? ......._______A
How many customers do you have?................______B 
o Customers less than a year old............______C 
o Customers more than a year old .........______D
What is your net profit margin? (%age) .........______E
How many leads do you generate each year? ______F
How much do you spend on marketing? .........______G
</ul>

If you can convert more leads, by targeting better and closing more sales, then you will reduce your customer acquisition cost.I guess most of you will know where I am going with this, but it is remarkable how many people have not even done this basic exercise. In another article on CRM, I will refine this further, by helping you find out who your most profitable customers are.

OK, let's do some simple mathematics. To get how much each customer is worth to you do the following.

Customer Worth = (______A * ______E) / ______B – this is the Euro value of what each customer contributes to your wealth fund annually.

If you spend less than that on each lead, then either you are doing very well, or else you may need to spend more. Some marketing pundits, who want your money, suggest that you can afford to spend all of your profits, after your own salary, getting new leads. Personally 10-20% spent wisely can yield even better returns, as your business grows.

So how much do your customers actually cost to get?

Customer Acquisition Cost = ______G / ______C is this more than 20% of your Customer worth? If it is we need to look at two key things the first is your

Lead Conversion Ratio = ______F / ______C.


If you can convert more leads, by targeting better and closing more sales, then you will reduce your customer acquisition cost. What's more, by analyzing which lead campaigns were successful insofar as they had the highest lead conversion ratios, you can target and focus better.

Conversely you could spend less on trying to get new customers, now don't just cut your budget, get a lot smarter in how you operate your lead generation programs!

So let's look at your existing customers. Are their ways that you could sell more to them? Sell additional products and services? It is said that it costs at least 5 times as much to sell to a new customer as it does to an existing customer.

Existing Customer Worth = (______A * ______E) / ______D

Simple mathematics again, either increase your existing leads generation budget by 1/5 th and double your sales, or significantly reduce your lead generation budget and get better results and spend some of the savings on up-selling to existing customers.

In conclusion, by operating a smart lead generation campaign for customer acquisition while continuing to sell to existing customers, will reduce your marketing budget, increase your sales' revenues and break the bank with profit

For previous articles and interviews like this, visit 3R's InfoCentre. Subscribe to Success at www.3r.ie . This free monthly email newsletter, will grant you access to Interviews and articles on sales, marketing, CRM and wealth creation as soon as they are written.

Author Bio:

Some other recently published marketing & promotion articles

The Affiliate Marketing Network Advantage by Laurie Raphael
Where do you find ideas for affiliate opportunities? You may already have a website or websites that generate a great deal of traffic. You may want to create a website in an area you ...

Searching for a Newsletter Printing Specialist? by Charmaine Joy Caro
The Essence of Newsletters Newsletters for some people are just a piece of an information sheet. But the value of newsletter is beyond that. They are the most economical means to make your company noticeable ...

Marketing your business online by Candy Steele
If you are not already marketing your business online, it is time to start. Although there are a few exceptions, just about every business can benefit from online marketing. There are ...

Public Relations by Ismael D. Tabije
Public relations is the art and science of managing communications between an organization and its key publics to build, manage and ...

What's the Best Thing about Newsletters? by Charmaine Joy Caro
Newsletters are something that a business should not take for granted. It's one effective way of maintaining a solid relationship with your customers. Basically, the newsletters are the means used by marketers to boost up their brand. ...

The Science of Catalog Printing by Charmaine Joy Caro
Catalogs – What Are They? Catalogs are what most businesses use these days to complete their marketing plan. They are also known as booklets, manuals or booklets. They are commonly printed in full color to ...

Publisher Guidelines

You may reprint this article electronically in your newsletter or on your website, free of charge.

If you reprint this article from our site, then you must keep everything intact. This includes the articles title, author name, articles body, authors bio / resource box, the links contained within the article, all copyright notices and the link pointing back to our site. All links within the article must also be made active / hyperlinks.