Focus Your Marketing Dollars with this Formula

Don't waste your resources the formula that all small businesses should consider: LV = (P x F) x N – MC. Check out what this formula may mean and why they are relevant to your business and thinking these through can help you avoid wasting your precious marketing budget and think though how much you need to spend for each new customer. Knowing your metrics is critical to directing your efforts. Don't forget that there are many low cost strategies available to you in the Business Advisory so hold onto those precious dollars and make sure each dollar counts. If you want help reach out.

Today you’re going to learn how to find a target market of potential customers so you aren’t wasting precious resources on blitz marketing.

So, the two questions you have to ask yourself are:
 - What do people really want to buy from me?
-  What related products are they already buying?

Once you figure this out you will know who is more predisposed to purchase your products/services. Then, you find other businesses with the same customer base who you can customer share with. Come up with an incentive and great arrangement to encourage both of your customer bases to shop at both of your stores.

The basic concept is this:

You want to find existing businesses who have the customer profile that you are looking for to market your products/services to.

Then strike up a relationship with those business owners to work out an incentive for customers to purchase from both businesses.

As a result, you have an audience to market to and they generate an added value from their current base.

So, how do you figure this out?  There is a great formula from Jay Abraham you can follow with great success.

LV = (P x F) x N – MC

Here’s what it all means:
LV is the life time value of a customer
P is the
average profit margin from each sale
F is the number of times a customer buys each year
N is the number of years customers stay with you
MC is the
marketing cost per customer or customer acquisition cost (total costs/number of customers)

Once you know how much you need to spend to attract a new customer, you will know how much of an incentive you can offer to a business to help attract new customers.

So, here’s a  step-by-step process for continuing:

  1. Find companies who already have the customer base you are looking for.
  2. Negotiate an incentive for them to share that customer base with you.
  3. Focus your marketing resources to this group of predisposed customers.

If you need help working through this process, JOIN THE BBR NETWORK check out our FREE test drive for the most comprehensive system of marketing tools and resources. And take the leap: Join our Mastermind.

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#BBR Network, #Profitability, #Small Business Growth, #Small Business Marketing and Sales, #SMB, #SME, Build Business Results, Raksha Sukhia