Over the years as a small agency we’ve helped hundreds of small businesses in various capacities.
One of the most common questions especially among the smallest of businesses is about how to reduce the budget. Don’t get me wrong- larger companies are definitely cost-conscious and want to “sweat the capital” too, and I can appreciate it. It’s really though the wrong question and wrong concern.
If you could make $20 every time you spent $10, how much would you spend?
This is the basis of marketing. Your goal is not save money, your goal is actually _spend_ money, but in a way that systematically, repeatably brings back money, with respect to “the float”: how long the money is out.
Example for real estate:
- You spend $1,000 and generate 100 leads. You’re in for $10 per raw internet lead.
- 1/2 of those leads are junk. You’re in for $20 per real lead (50 total)
- 1/2 of those leads don’t qualify. You’re in for $40 per qualified lead (25 total)
- 1/2 of those leads stall, because they’re “just testing the market” and overprice, or are timid with their offers and get beat out – so you’re in for $80 per serious, motivated warm-body lead, (12 total)
- 1/2 of those turn into real deals (6 total – $160 per deal)
- 1/2 of those fall apart during closing (3 total closed deals – $333 per closed funded deal).
Assuming your average commission in real estate is… $7200? The question then is how often would you spend $333 to make $7200, with a delay of ~150 days.
As often as possible, and you’d spend as much as possible.
This is marketing. Asking about the budget is a concern, for cash flow and capital deployment, but it’s not the big real issue.
Marketing is really simple actually – 2 parts:
- Compelling irresistible offer
- Delivered to the right eyeballs
The real issues for any business is:
- Do you have a minimum viable offer? Typically a landing page with benefits, and a capture method or buy now button. This is your offer and capture-mechanics.
- Do you have a method to deliver that offer to eyeballs? It must be repeatable and scaleable so when you find that you spend $100 and get back $200, then you spend $100,000 and get back $200,000. This is advertising, traffic.
An important note: Remove the offer or traffic and the system falls apart.
A great website with no traffic is like a storefront… selling blankets in the middle of the sahara desert. You’ll get lucky on occasion, a few people will stumble in by chance, but it’ll be luck, random, not controllable. It’ll be cheap! Think of the money you’ll save on real estate!
Compared to a storefront in downtown Manhattan or Beverly Hills. There you’ll have foot traffic, and you’ll pay through the nose to get storefront ground-floor space. That said, if you have that space but your storefront looks cheap, made with cardboard – who’s going to buy?
Saving money on either part renders the system useless.
Certain marketing systems are not reducible.
So, while the analogy is maybe a bit trite – it’s a reminder for clients concerned about budget – do you really need this? Is it going to help conversion (people who do buy once in your store / on your site / considering your offer)? If so, how much did you spend to get the people there?
Having worked with over 200 small companies and having seen some of them blast off and become successful, while the most flounder – this is bar-none the most common mistake that separates the two groups: the ones that succeed build a customer factory. They push through that startup cost.
Also, a related note: because marketing often requires multiple impressions, marketing (advertising) is often somewhat similar. Running TV ads is ok, and online ads only is ok, but when you run both together, you’re more likely to get a multiplier effect than additive – this is how large brands work and stay large brands.
So how do you make a dent on a limited budget? Remarketing / Retargeting is one of the first things you should do, and build a “mini-brand”. For most small businesses, you need (1.) a mini-brand, respect as that expert, then (2.) continued presence-of-mind.
For real estate agents in the above example, you need to build the brand to “Sally does real estate, and I can ask her about how to handle my aging mom’s house.”
This requires multiple impressions and also respect – the target needs to know what you do, and that you’re good at it (i.e. customer success stories).
While all of this is maybe a bit marketing 101, success can be simple. Not easy, but simple, mechanically – it’s just math.
If you have a budget and need help, contact us – we’re happy to dive in and give you options – or check out our incredibly powerful software systems developed out of necessity below.