Business marketing tools are only useful if you use them wisely. Your most important business marketing tools are those you use to calculate results. That’s the only way to know if your marketing works and what kind of return you’re getting on your investment.
Every local business needs a continuous influx of new customers or patients or clients in order to grow. And sometimes you use business marketing tools for more specific purposes such as:
- Promoting your annual sale.
- Boosting seasonal sales.
- Introducing a new product or service.
- Obtaining referrals.
Whatever the intent, you can’t measure success without metrics. Simply saying you want “more customers” or “more revenue” has no value. Is two more sales enough? Maybe, if you sell homes for a living, but certainly not if you sell doughnuts. And how much new revenue is “good”?
Calculate your profit.
The amount of revenue you generate from each campaign, minus what you spent on marketing and serving the customer, equals net revenue – your profit. At the very least, you want to cover the cost of your marketing. The lower your average sale, the more sales you’ll need to do that. And of course your goal isn’t to break even, it’s to generate the largest profit you can.
The greater your profit margin, the higher your return on investment.
You can also calculate any number of “cost per” rates.
Response rate is the most basic – how many people heeded your call to action. You can delve deeper to compute cost per lead, cost per sale, etc. All this data is interesting, and you can learn from it, but ultimately ROI is your bottom line.
What is each customer worth to you?
Experienced marketers know it’s cheaper to retain existing customers than recruit new ones. Here’s why: your best customers are the ones who spend the most money year in and year out and stick with you for the longest period of time – a lifetime, if you’re lucky. We call that customer lifetime value, or CLV.
Follow these steps to figure that out:
- What is your average sale amount?
- What is the average number of times a customer buys from you in a year?
- How many years do you hope or expect to keep that customer?
- Average sale x frequency/year = average annual customer value.
- Annual average value x number of years = CLV.
Whatever business you’re in, your CLV is undoubtedly a very high number. Now you can see why campaigns that boost loyalty, upsell existing customers and win back lapsed customers can have such a significant impact when mixed with business marketing tools aimed at attracting new customers.
How can you ensure you’re getting top ROI? Get professional help.
Creating and producing marketing campaigns takes knowledge, skill and time. A full-service direct mail marketing company is staffed with experts. They can provide comprehensive assistance with the mechanics of postcard design and mailing list selection, ensure you get top-quality printing and guide you with professional tips to make sure every detail of your mailing is aimed at achieving superior results. You can see a greater return on your investment and grow your business faster.
Boost your ROI even more by letting your direct mail experts manage the entire process for you. Spending your time and energy on other important aspects of building your business is a better use of your skills. And if you’re like many local businesses, the improved results you gain from your marketing will more than pay for the cost of your direct mail service.
In the end, it isn’t the cost of local business marketing tools that matters, it’s the cost-effectiveness. That’s your return on investment.