Analyzing Your Marketing Spend: What Would You Pay for a Top Client?
Now I may be dating myself here, but can you remember the old ice cream bar jingle for Klondike Bars? It went like this: “What would you do for a Klondike Bar?” People would do crazy stunts such as chirp like a bird or make an elephant sound in a crowd of people. Well, when I saw a rerun of that commercial recently, I thought, "What would someone do for a good client?" Or better put: What would someone pay for a good client? When we review our marketing, we are doing just that, investing in the opportunity and possibility of getting a new client, or generating new or existing business. Most people do not know what it costs to get a new client—in fact, most rarely, if ever, analyze their marketing spend to see if it’s viable and cost-effective.
As I consult globally, I am amazed at how ineffective most businesses market themselves. As business owners it is critical that we differentiate and set ourselves apart, because if you are not different, you are the same! Now is the time to seize that opportunity.
This article will be a mathematical analysis of your marketing. You can add or delete zeros at will—the bottom-line is the same. I have used arbitrary figures, but you can plug in your specifics to see the outcome. (These are my numbers when I was a marketing consultant.) Most people today are looking for that Holy Grail idea that will help them get new business, but in today’s market there is nothing cookie cutter that will be effective across the board. Marketing today MUST be strategic and laser focused in order to be effective—that’s the beauty of strategic marketing utilizing promotional marketing—and most importantly, if done correctly, it’s measurable.
So, what exactly is your ideal client worth? What would you spend to get that new client? How much does your best client spend with you on an annual basis? And better yet, what is the profitability, long term, of that client? Take and evaluate your client list and separate them into A, B, C and D categories. Then, place the B, C and D list aside. Take the A list and total the amount of money spent last year with that group, and divide it by the number of clients in that category.