Thursday, September 06, 2012

Small Business Visibilty Has a Cost and a Benefit That Can be Measured - 30/101

Does your doctor make a decision about treating your without statistical information?

Visibility, like any logistical issue, has a cost/benefit ratio that can be applied to determine outcome.  If you can't be found, it doesn't matter how great your unique selling proposition is.  With a bit of data collection you can decide how much it costs you to get a lead or a customer in the door.  With a bit more analysis you should be able to determine what that lead or customer is worth to you in sales or profit.  After that, assuming the numbers don't change, the rest is just math. 

Example: If it takes three contacts (leads or phone calls or door swings) to get a sale, and that sale will result in $100 in profit, then I now know that I profit $33 per contact.  If my cost per lead is $40, then I either need to reduce the cost of that lead or increase the sales to that contact.  Some of those contacts may continue to produce profit into the future, so that should also be part of the equation.  What percent of those who purchase become clients, and what do they purchase over X time. 

If 1/2 of those who purchase once, go on to purchase another average $100 over the course of a year, my profit goes up by $50 (.5 X $100) to $83 ($50 + $33). 

Do you keep those statistics? Or would you be able to estimate this information?

On the cost side you need to know what is driving people to make contact.  Street visibility, promotions, word of mouth, traditional advertising, online paid advertising, online organics efforts.  I could create a longer list, but these are the basics. 

In order to get a proper feel for what my cost/benefit ratios are, you need to become effective at not only measuring the value of a new clients, but also asking them how they found you and keeping a record of that.  If pay per click (PPC) is costing your $40 per lead, and mailings are costing you $20 per lead, it shouldn't matter that mailings are "old school."  Keep doing mailings. 

For retailers, the street visibility issue is often overlooked.  There is a reason that smart retailers flaunt the landlord or city rules on signage.  There is a reason that smart retailer are using flags, banners, balloons, painted vans, lighted signs, and sign spinners to generate traffic.  The longer you are in a location, the more you become a part of the scenery. Have you had new customers say that they never knew you were there? You need to increase your curbside pop! 

This is also true online.  Your website needs to be updated, your other content needs to be changing and your search engine marketing must keep up with the times. If you are not #1 or number 2 or at least on the first page of Google Places (now called Google My Business), you are at a huge
My client is #1 under this competitive keyword
disadvantage compared to those who are. Social media may or may not have a short term pay off.  It might not even have a long term pay off, but deciding how long to give it is a logistical decision. 

Take away.  You need stats.  Without stats your shooting your gun with your eyes shut and no computer guidance.  Your likelihood of hitting the target under those circumstances?  You already know the answer.

Action Steps for day 30:
  1. Find out how much a customer is worth to you
  2. Find out how many calls or walk-ins you need to get one customer
  3. Find out how many new clients are coming to you each day
  4. Find out how these new clients are finding you
  5. Find out how much each new client is costing you through each method you use to attract them
  6. Change or eliminate any method of marketing that isn't making you money

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