Week Five of the Eight Week Plan Brighter Sales and Marketing

Written by  //  November 28, 2012  //  Daily Juice  //  No comments

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So we’re still on a mission to close the Gap we found in Week 2.  This week we’re going to look at increasing sales…..but in a way that doesn’t cost us a fortune. And that ‘fortune’ bit is just so important because one of the main things that stuffs a small business is spending too much, way too much, finding customers.



So what does it look like when you stuff your small business by spending too much on sales and marketing?

Well here’s a little number picture of a struggling small business. The numbers are from a real (incognito of course) business and at the end of the year their figures looked like this:


I’m going to call the business owner Abby. She worked about 40 hours a week in the business, took just two weeks holiday and earned the princely sum of $5000 for the whole year.

Here’s what she said

“I  thought my business was going pretty well, I was selling my product at an awesome 200% mark-up and and my admin costs were really low. I really expected to make good money this year but somehow I ended up earning just $416 a month.”

How did that happen? Well Abby hadn’t realised she’d spent almost 60% of the business’ income, um, buying customers.

Now Abby, bless her,  is neither weird nor rare! Most of us spend too, too much finding customers and we often don’t realise it!

So first tip for the week is this

1. Start recording your marketing and sales costs

Let’s not make this too hard otherwise we won’t do it.

  1. Marketing and sales costs


My easy ‘cheat’s’ way of getting financial information that makes sense is to put all the costs of the business into one of three “buckets”:


  1. Cost of the product or service
  2. Cost of selling and marketing
  3. Cost of admin


Having such little choice of which bucket costs can go into quickly diffuses any issues as to how to categorize a cost. You can of course still do your more precise record keeping, but when it comes time to interpret what the numbers say, just do this bucket approach!


All you have to do now is look at how much you are spending each month and compare that to your sales. Now I do know that the sales and marketing costs that you incur in any one month may generate sales for the months ahead. But that’s all a bit hard to work out properly so this is the completely-not-perfect version. But it will do!


So each month do a calculation of sales divided by marketing costs. Your aim is to get that percentage decreasing over time! (But, of course, still keep sales buoyant)


  1. Marketing and sales time


The other big sales and marketing cost of your business is your time. In fact many of us spend more time doing sales and marketing than we do anything else!


The best way to see how much time you’re spending on sales and marketing is simply to record it. So starting now get a little notebook and write down every 15 mins you spend selling and marketing. Keep the notebook for a month or two (yes!) and then work out what your monthly time spend is.


Now look at your sales revenue for the month, divide it by the number of hours you spend doing sales and marketing and the answer is the number of dollars you earn per hour of your time. It can be quite a startling revelation! Try it.

Here’s a worksheet you can use to record your information. It’s in “word” because some of you don’t like spreadsheets. But if you are fine with spreadsheets feel free to use one instead!

2. A clever yet simple way to get more customers

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This tip is inspired by the guys at Net Promoter. Here’s what you are going to do:Ask every past customer, and every customer from now on, this ONE question:

“On a scale on 1-10 how likely is it that you will recommend [my  business] to a friend?

This is a simple and almost humble marketing tool and it works in a very clever way. Here’s how:

  1. Customer referrals are free marketing so, in our quest to keep the cost of marketing down, we want more of them!
  2. When customers answer this question you will know whether your customers are open to referring you. If they are, you can encourage them to do it (!) and if they’re not, it’s time to find out why.
  3. When a customer answers the question with a score of 9 or a 10 it means they are open to actively promoting you.
  4. If you get a score of 7 or 8 it means that your customer likes your stuff, but probably not enough to go and promote it. This could be why your marketing costs are high – your customers don’t love your product.
  5. If you get a score of 6 or below you’re in the poo! The customer really didn’t like your business and might even be actively putting future customers off!
  6. If you get lots of 6s (and below) then before you do any more marketing, have a big think about whether you’ve got the right product for your customer. (Tip: try going back to the customers who gave you a 6 or below for help with this!)
  7. So this gives us a feel for whether a customer will refer us. But what next? You can start asking them to actually give you a referral! You don’t have to pay them to do it, just ask. Most customers are only too happy to oblige.
  8. There are also two hidden marketing benefits of asking this question:
    1. When a customer gives you a 9 or a 10 they most probably will go and find a customer to refer to you without you asking them!. Sounds crazy but we humans are psychologically programmed to fulfil our promises and this little question works as a promise!
    2. Asking the question gives you the opportunity to get in touch with old customers who haven’t shopped with you recently. You know the saying “out of sight, out of mind”? well your old customers could well have forgotten about you. This gorgeously simple little question gives you an excuse to get back in touch! Once they remember you you can expect some return visits!

One important tip to making to making this work

*Only ever ask the one question*. I know, you’ll feel like doing  a whole lot more. But don’t! This works, on many levels, because it is so simple.




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