To Go Or Not To Go - How To Decide If This Marketing/Design Project Will Bring In Revenue
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Deciding to move forward on a design and marketing project can be a big deal, but it doesn’t have to be. Beyond the emotional benefits of feeling more confident when promoting your business and looking more professional in front of prospects, brand recognition and a myriad of other benefits, let’s just take a look at the numbers. For all of you number crunching, “Just bottom line it” business people out there, this bulletin will take a logical, methodical approach in helping you to decide whether to “Not go” or “go” on your next design project. Step 1: Investments, Not Expenses Quick Note: Now if you’ve had design and marketing projects created before and felt they weren’t worth the cost, I’d offer that the poor investment wasn’t in WHAT you did, rather WHO you invested in. Designers that aren’t experts in marketing, advertising and learning about your business are typically bad investments. To get the most out of your time and investment, you want to only work with business savvy designers who understand your business, goals, clients and competition. Let’s assume you’re working with a terrific designer, and you’re interested in having a tri-fold brochure designed. Ask yourself, “What do I need to make back on this investment to break-even on my investment?” Step 2: Let’s look at this example: You will receive 800 units of marketing collateral at your disposal From that marketing collateral you would expect at least 25 people to take action and buy from me (that’s just over 3%). As a business owner, you have to ask yourself, “How likely is it for me to achieve just a 3% response on my project?” “Am I likely to get just 3%?” If the answer is yes, let’s move on. If the answer is no, don’t do the project! FYI! I read a list of the five key time wasters. Actually there were more than that - but five of them seemed to apply to business owners I know and to me. I had to laugh when I read the date on the article. Someone had given it to me three years before and I was just now reading it. I guess it comes as no surprise that number one on that list was procrastination.
Let’s say your average sale is going to be $150. Now do a few quick math calculations: Your breakeven point will be 7 people. ($1000 / 25 people) Your Estimated Gross Revenue = Minimum # of people you expect to buy (just 3%) X Amount of average Sale 25 people X $150 average sale = $3750 Estimated gross revenue Net Revenue is Gross - Expenses = $3750 - $1000 = $2750 Net Revenue (this is how much you made) Your ROI, Return on Your Investment = 275% You increased your money by 275%; was this a good project to invest in, you bet! Step 3: The Odds and Ends You Want to Get Clear On If I do this design project, what’s the likelihood I will be able to attract more customers? What will these customers mean in terms of dollars and cents? What will happen if I don’t do anything? Will I expect sales to go up or down if I don’t do anything? What might it cost me in sales if I don’t do anything? Am I happy with the rate this company is growing? Do I need to take steps in order to make it grow? What do I plan to do that’s going to make something happen? Do I feel like I am losing out in sales and market share because I am getting lost in a crowd of competitors? If I had a strong brand and professional marketing collateral, would that allow me to not compete so fiercely on price? Would that allow me to actually charge what my products and services are worth? FYI! The best email newsletter I’ve seen is Denny Hatch’s Business Common Sense. And it’s free. Denney is a direct marketing guru of the first order. A colleague of ours who is in the direct marketing business sent it to me originally because of a particular article. Now it is one of the few ‘must reads’ for me. If you Google his name I’m sure you’ll find out about him and how to get in his distribution lit.
Granted, I’ve oversimplified the decision here in the interest of time, but the decision to “go” or “not go” isn’t nearly as difficult as business people make it. What’s the likelihood that you’ll make back your investment? And what will happen to your company if you decide to do nothing? If you decide to ignore all of the intangible benefits from your project and just look at the ROI, you’ll be able to make quicker and more decisive decisions about your projects in the future. Let me know if this has been helpful, email me and let me know what you think. About Jeremy: If you are looking for more free insight and inspiration, you’ll want to get in on the �Can-Do Confidence Builder�. Emailed weekly, the Confidence Builder provides you with essential marketing and design insights that help you get the most out of your investment and help you to stay one step ahead of the competition. Email me at comments@candographics.com and asked to be added to our list or visit http://www.candographics.com. Realize Your Personal, Professional, and Business Potential With A Little Help From Your Friends. Leave a ReplyYou must be logged in to post a comment. |
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