Why I hear you ask? It’s a bold opening statement you will have to agree.
However, there is a reason why I say this. I know most companies have a marketing budget of some sort. It might even seem on the surface of it like a sensible idea. After all don’t we need to spend money to get new business? Well, on the surface of it yes.
But… That’s not what I said. When I am talking about a budget, what I mean is a fixed amount of money that you set aside to do that. This is where it all starts to fall appart.
Because if you have a budget either…
a. You’re Spending Too Much
b. You’re Spending Too Little.
Just think about that for a second.
If it is working and your marketing is producing you a profit you want to spend as much money as you can. If it is not working you should not be spending a penny at all.
A business should not think about budgets when it comes to marketing.A business should only concentrate on allowable cost for client acquisition. That is how much does it cost to get a new customer and can you do it profitably.
Most businesses with budgets don’t know what a client is worth to them. So they have to guess at how much they spend.
Smart businesses work out what a client is worth to them to the penny. Then they figure out how much they can buy a client and still remain profitable.
You need to do some calculations for this like cashflow and lifetime value of your customer, but once done you are in the driving seat.
Because the business that can spend the most to get a customer wins. (Have you figured out why?)
I will leave you to ponder on that. For now, let me ask you another question…
What is a client worth to you?
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