Using social media sites such as Facebook, Pinterest and Twitter don’t need to cost you anything, especially if you avoid being sucked in to paying for adverts.
And you wouldn’t want to be wasting your hard earned money on such awful things as promoted posts or sponsored tweets!
Or would you?
The problem that many business owners like yourself face is whether you can justify spending money, especially when you are running on a shoe-string budget. When the cost of starting up a business has dramatically dropped over the past decade and the internet has meant that you could be building a global brand from just a laptop at your kitchen table, it’s hard not to ask the question, “What’s the cheapest way to grow my business?”
But it’s one of the worst questions you can ask!
Where most businesses go wrong by trying to avoid expensive marketing and find the cheapest options, is that they haven’t worked out two critical bits of information:
1) How much is a new client worth?
2) How much will it cost to attract this new client?
Until you know these two figures (or at least have a bloody good go at guestimating them!), you will never know what marketing is going to be cheap. And what marketing is going to be expensive.
Let me give you an example.
Facebook ads – one of the most controversial and talked about piece of marketing at this moment. When Facebook started to launch their promoted posts offers, Facebook users where up in arms at about it.
“How dare they expect me to spend my money to get my posts seen when I’ve spent the past year building up my fan base,” was one comment I saw in a discussion forum.
Now whether you believe that Facebook has sold out or not, there is no denying they are need to make a profit. They are a business after all. But that’s not the debate here.
The debate is whether Facebook promoted posts is an expensive bit of marketing or not, which I know is what a lot of business owners feel.
So back to those two critical bits of info – how much is a new client worth and how much does it cost you to attract them. If your average client is spending £500 a year with you and, at the moment, you are spending £50 to get that client (bear with my over-simplistic figures – it’s just to demonstrate my point), then spending £50 a month on Facebook promoted posts attracting one new client is not expensive.
If you can spend time working out what works and improving your promoted posts and get that monthly spend down to £30, whilst attracting two new clients, then Facebook promoted posts starts look really quite attractive.
However, end up spending £100 a month and only getting one client from those ads, then your Facebook ads are very expensive and start to eat in to your profit margin per client. It’s probably a wise decision to test out other marketing options and do something different.
It’s the same principle with all other types of marketing – direct mail, postcards, adverts in your local newspaper. All of these options are generally considered to be “expensive” … and usually by business owners who don’t get any results from them!
No results = very very expensive.
But £500 spent on leaflet dropping a targeted neighbourhood with a “wow” offer which results in 20 new clients spending £500 with you that year and suddenly, that initial spend seems very very cheap!
(Quick note – I am not for one moment suggesting that a leaflet drop is your next new marketing initiative! It could be … but you have to test to see what results you get.)
So if you have found yourself asking “what’s my cheapest way of getting new business?” … will you stop right now!
The first steps you need to take in working out where you are going to spend your money is be find out what your clients are worth to you and how much you are currently spending to get those clients in the first place.
It’s not an easy task, I grant you. I spent the best part of two days recently on this very project – having had 3 shopping carts in as many years didn’t particularly help my cause!! But, now that I’ve got these figures I am ready to work exactly what marketing will be expensive and how to avoid it.
And so can you!
Marketing is only expensive when your results fail to generate the revenue you need. Some marketing may feel expensive at the start. Spending money is tough to do at time! But if you know your figures, the marketing that feels expensive can often be the cheapest way to get you your new clients.
Let me know what you come up with below in the comments. Have you worked out these figures yet? And what impact has it had on your marketing efforts? Or are you brave enough to admit that you are still firing in the dark? 🙂
Share your ideas and thoughts below.