One of the most frustrating aspects to business is when you have all the marketing tools your business needs, perhaps even some your business does not need and yet you still see no results. You may even be spending time and effort marketing your business and yet conversion ratios and traffic remain constant or even drop. The reasons why marketing plans fail are numerous however; one of the primary reasons is that it was not the right marketing plan.

Every business is different and that includes businesses that sell the same products and services. Every business has something that is unique, the group of people they are targeting, the area they are working in, the options they have available to them. These different aspects mean that the same marketing plan is not going to work on every business.

When a marketing plan fails, it is important to find out exactly why it failed first. The reason or reasons are is essential. It may be that there is only one aspect of a marketing plan that failed, it may be multiple items or it may be the entire plan.

Research

Research is an essential aspect of marketing and inadequate research is one of the biggest pitfalls that can affect a marketing plan. Research provides a wealth of information that is vital to the success of a marketing plan. Generally, research is done on the target market. If a target market is not known, research is done to determine what market is going to be the most likely to benefit from the product or service provided by your business.

This is the group of individuals you will want to target and in some areas there may be multiple groups. While it may be possible to market to all these groups it is, in most situations better to market to a single group or groups which contain a large percentage of similar traits. This makes it easier to consolidate a marketing plan as well as eliminates a significant amount of research, time and effort.

The second aspect which needs to be researched for a marketing plan to be successful and is also one of the reasons why marketing fails to produce appropriate results involves research competition. Researching competition is not just about researching the prices of a competitor. It includes noting things such as lay out, finding out what marketing techniques the competitor is using and how often these tools are used for example.

Many business owners and beginning internet marketers fail to note anything more than price and perhaps general layout. As a result, they are missing vital information that can save time, money and effort when it comes to setting up their own marketing plans. It is also important to keep in mind that you want your business to be unique from your competition.

Get a good idea of the types of deals, offers, discounts and promotions that your competition uses and offer something different to help your business stand out. Many people simply do what their competition does. In doing so, they often lower their marketability and their marketing plan can ultimately fail in this area.

Marketing Tools

Having enough research to create your marketing plan is only the first step in solving the problems that often cause marketing plans to fail. The next step is to take the time to pick out the right tools. Having the right tools for the job is essential to ensuring you get the most out of your marketing strategies.

Marketing tools have diversified over the years. Tools are not limited strictly to email and promotional options. Video, social networking, SMS texting, in addition to email and promotional marketing tools are also available. The increase in available options means that there is a greater spectrum to work with. It also means that picking the right tools is more important than ever.

Pick tools that are going to be easy for you to use, require minimal maintenance but provide you with maximum potential results. This will help to prevent your marketing plan from joining the ranks of those that have failed. Knowing the right tools to use can often be a trial and error process. The important thing is to avoid one of the reasons why marketing plans fail. In this case the reason involves putting too much into a single marketing tool.

Action, Action, Action

One of the biggest reasons why marketing plans end up failing is the lack of action. Marketing is an active part of your business, it is not a set and forget aspect of you business. In order to ensure that a marketing plan succeeds you must be actively engaged in working that plan. This means that email marketing messages should be updated and redesigned regularly.

SMS messages should be rewritten after very send. These messages should be short, contain only the minimum necessary information. It is important to remember that SMS marketing is relatively new and involves sending messages to mobile devices that often indicate repeat messages.

Videos should be produced, edited and updated to as high a level as possible. Computers and technology can turn just about any computer into a production studio with the right software. Keep videos interesting, engaging and relevant. The videos should be related to the company, the products or the services offered.

It is important to set up a marketing schedule and find out how much time, generally through trial and error that you need each day, week or month to handle all your marketing tasks and keep everything up to date.

The reasons why a marketing plan might fail are numerous. Some of these reasons include, failing to do the proper research into the market, the competition as well as the tools available. Other reasons can be failing to have enough tools, having too many tools or not using the tools you have effectively. Taking the time to make sure that you have the information you need as well as putting in the effort to ensure your success can go a long way to eliminating these reasons.

Next, Discover here how to outsmart your competitor, ethically dominate the search engines,and legally siphon off tons of cash in hand buyers from your website!

As business owners and managers, we need to look at a variety of numbers to gain a better understanding of our businesses. In this article, we are going to consider two very important metrics in business marketing – Cost Of Customer Acquisition and Advertising ROI (Return On Investment).

One of the most important numbers we need to always be mindful of is the “Cost of a New Customer” or “Cost of Customer Acquisition”.

Understanding Customer Acquisition Costs

If you are unfamiliar with this concept, let me give you a quick tutorial on this advertising metric.

Suppose you run an advertisement in your local newspaper for your furniture store. Suppose for the sake of this example that you paid $1000 for your display ad in the newspaper.

Now, suppose your advertising brought 4 new customers into your store, who bought from you. Suppose also that the average spend for each customer was $1500.

With the example I am drawing, your $1000 display advertisement in the newspaper brought in 4 customers who spent a total of $6000 in your store.

I am going to keep this example simple, so that more people can keep up with the numbers.

On the basic premise of our example, you generated 4 customers after an outlay of $1000 in advertising. So your basic Cost Of Customer Acquisition was $250 per customer.

If your business received fewer customers, from your outlay of $1000 in advertising, then your Cost Of Customer Acquisition is more expensive.

But, if your business earned more customers who spent money, then your Cost Of Customer Acquisition would be much smaller.

In its simplest form, the Cost Of Customer Acquisition is the money spent to get the customer to your store divided by the number of new customers acquired. We will look at this in more detail, later in this article.

The Best Way To Measure Sales And Marketing Performance

Entrepreneur Magazine in a 1999 article reflected on the Cost Of Customer Acquisition in the dot com world. The article suggested, “the cost of new customer acquisition is one of the best ways to measure sales and marketing performance.”

In 1999, the Cost Of Customer Acquisition for the following companies were:

• BarnesAndNoble.com – $42
• Amazon.com – $27.60
• Priceline – $32.30
• Beyond.com – $29.30

On the surface, these numbers may seem small. But, Amazon’s Average Sale is in the $17-range! This makes the challenge that Amazon and other major retailers face fairly transparent. If these retailers could only count on one purchase from the newly acquired customer, then these businesses would be losing money by the truckload.

Fortunately, Amazon continues to perform well in Repeat Business from a single customer. The following calculations reflect additional numbers that we business people should also factor into our Cost Of Acquisition metrics.

The Real Value Of A Customer

Amazon’s first-sale may only be $17, but in 1999, Amazon’s Average Sales Per Customer was $116, up $10 from the previous year. Unfortunately, Amazon isn’t very forthcoming with these numbers, so after two hours research, I was unable to come up with more up-to-date numbers for you to consider.

The point of mentioning this is that it is important for business owners and managers to recognize that the Value Of A Customer is not how much sales revenue is derived from the initial purchase, but more importantly, from the Lifetime Value Of A Customer.

If we looked at Amazon’s Cost Of Customer Acquisition only in terms of that first sale, then they will be losing money hand-over-fist. With a Cost Of Acquisition of $27.60 and the first sale of $17, Amazon could not stay in business long if they were continuously producing numbers at that level. However, once you factor in the Lifetime Value Of A Customer, then Amazon is spending $27.60 to acquire a customer that is worth $116 in sales for them. Therefore, by measuring the Lifetime Value of a Customer, Amazon is spending only 24% of their revenue in order to acquire one customer.

Few businesses invest 24% of their revenue in advertising, but Amazon hopes that the Lifetime Value of a Customer will eventually exceed the $116 value, known to have existed in FY2000.

As the Lifetime Value of a Customer increases, the overall Cost of Customer Acquisition will fall, as an overall percentage value of Cost Of Acquisition divided by the Lifetime Value of the customer.

The Compounding Lifetime Value Of A Customer

If you have a hair-cutting salon and your advertising budget for one month is $1000, and you get 30 new customers through the door, who will spend an average of $20 for a hair cut, then your basic Cost of Customer Acquisition is roughly $33.34 to gain $20 in new sales.

But if only half of your 30 new customers become regular clients, then you can anticipate 15 of those customers coming to your hair salon at least once a month for the remainder of the year. Therefore, the first 15 customers will be worth $20 each, and the next 15 customers will be worth $240 each over the course of one year ($20 x 12 months). All told, your first 15 customers will put $300 in your cash register, and the next 15 customers will put another $3600 in your cash register.

Thus, in the hair salon example, your $1000 in advertising could generate new customers that will generate $3900 in new sales. Once you start to consider the Lifetime Value of a Customer, within the Cost of Customer Acquisition, then you will realize that the Cost of Customer Acquisition – although it might be higher than the initial sale – holds out the possibility and promise reducing itself as the Lifetime Value of a Customer increases over time.

As the end of the year winds down, you will be able to see that a $1000 expenditure was turned into $3900 in new revenue. In essence, for every dollar you spent on advertising that month, your return value was $3.90 over the course of one year.

In the second year, if only half of the original 15 regular customers or roughly 8 people stay with you for the full course of the second year, then the $1920 in revenue (8 people X $20 each X 12 months) you can expect from those customers could almost be considered free money. Of course, you will still have service fulfillment costs, but that second year will give you nearly $2000 in revenue that you will not have to chase.

Even if half of the customers drop off during the following calendar years, then a 50% customer attrition rate will allow you to have customers that could stay with you up to five years. Calculated against a 50% decrease in customers over each calendar year, your $1000 investment in advertising may translate into $7500 in revenues over five years ($3900 + $1920 + $960 + $480 + $240 = $7500), from the initial investment of $1000 in advertising.

The interesting thing about this scenario is that it is based on an advertising budget of $1000 ONE TIME. But, most businesses will continue the advertising process every month in every year. Therefore, the above example could compound month-after-month. Every month should bring the same or similar results to your business for the month and year.

Advertising Is A Process, Not An Event

Many small business owners have a dire misunderstanding of the nature of advertising and the value to be received from the advertising.

When business owners or managers fail to track and measure the new business generated from the advertising, then the business owners and managers will fail to see that advertising is an expense that can return huge dividends to the business.

When businesses fail to track and measure advertising successes, people tend to only see the money leaving the business without every seeing the reward coming back into the business. As a result, many business managers will employ advertising for a short time, then cancel the advertising, under the false belief that the advertising was not returning value to the business.

When businesses fail to understand the Lifetime Value Of A Customer, it is hard to appreciate any advertising method that fails to pay for itself in its first cycle. If Amazon was to only look at the initial sale generated by a new customer, they would quickly cancel all of their advertising efforts. Fortunately for Amazon, its management understands that the initial $17 sale is not the measure to use to determine the value of Amazon’s advertising efforts. Amazon’s management understands that the true Cost of Customer Acquisition should not be measured by the initial sale, but by the Lifetime Value of a Customer. In doing so, Amazon has ensured that it will continue to be one of the largest and most successful retail outlets on the planet.

When business managers fail to understand the Lifetime Value of a Customer, it is hard for them to appreciate and understand the compounding nature of the revenue stream for a business. It is hard for them to understand that money invested into advertising today, can deliver huge rewards over the next several years.

A Wake Up Call For Small Business Owners

According to Scott Shane, author of “Illusions of Entrepreneurship: The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By“, only 29-in-100 businesses will remain in business after ten years. That means that a full 71% of businesses started in any calendar year will be out of business in only ten years.

It is sad to say, but the reason most businesses fail is that business owners and managers fail to understand the nature of advertising, the importance of tracking and measuring advertising results, the Lifetime Value of a Customer, and the compounding nature of the revenue stream.

I don’t want to see your business on the trash heap of yesteryear. So, it is my hope that you will take this article as a wake-up call, as to the importance of advertising and its potential to lift your business into profits.

Next, Learn Here More On How To Advertise Online……And Then Watch This FREE 26 Part Step-By-Step VIDEO Course

Social networking sites originally became popular as a way for friends to stay in touch with one another and to keep up-to-date with what was happening in their lives, but they quickly became a place for business owners to grow their networks too. These days you can use these sites as a business building tool, but, more importantly, you can get to know your prospects, clients, and colleagues in a more relaxed and friendly environment.

This means that if you’re active on these sites and regularly contributing and seeking out new connections you can very quickly build your network and have a ready audience of contacts who are interested in what you have to say, your services, programs, and products.

However, I hear of many solopreneurs saying that they’re spending hours of time on their social networking activities, whether that’s on LinkedIn, Twitter, Facebook, or one of the other popular social networking sites, but are not seeing any benefits as a result of their time i.e. the amount of time they put into social networking is not comparable to the returns they are seeing. And so they lose interest and wonder what all the fuss is about.

As with any of the list building strategies that I teach, the real key to success is consistency. If you decide that social networking is one of the lead generation strategies that you want to implement then you need to be consistent in your approach to make it successful. You need to be spending time each week (several times a week) visiting each of your social networks, contributing, and building relationships.

Even though there are many, many advantages to this latest marketing strategy, there are several pitfalls that can easily be avoided if you’re aware of what they are.

Today I’d like to share with you my top four social networking pitfalls so that you can avoid making these mistakes and so utilize this strategy to grow your network:

1. 1. Not updating regularly. If you’re a beginner in this area, then you may believe that all you have to do is sign up for an account at one of the more popular sites, add your details, and you’re all set. In order for this strategy to be effective, you need to be a regular contributor to the network, actively seek out new connections, and participate and post regularly.
2. 2. Your profile is lacking in information. Add pictures; make yourself sound interesting and fun! People want to know about you, what your interests are, and see you. Always include a photo, and, the beauty with social networking is that because it’s informal, you don’t always need your photo to be a professional head shot – a more informal photo works just as well; let your contacts see the ‘real’ you.
3. 3. Not thinking relationships first! Social networking is all about building relationships with those people in your network – it’s not about getting new clients. Although you’ve probably heard of colleagues getting new clients via social networking, it really is about creating and building relationships with those people in your network. Remember… relationships first!
4. 4. It’s not about sell, sell, sell! If all you’re doing when you visit the various sites and post your updates is pitch your latest program, product or service then it’s no wonder you’re not seeing results. Share information with your network, whether that’s your own information or you’re passing along information from clients and colleagues. The more you share, the greater your results will be.

Whichever social networking arena you’re active in (and it may be more than one) remember the “social” in social networking – it’s to build relationships, make new contacts, and socialize. Inform your network, not sell to them.

I’m in the process of completely rethinking my business model, and that will be my primary focus as I plan this year’s business retreat for myself. Your business model doesn’t have to be at all complex, but should provide the guiding force for all that you do, like guiding you to the opportunities to accept (and those to decline), the joint ventures and strategic alliances to pursue, and the new ideas you should retain and develop, as well as those to let go of.

Here’s are the 4 steps I’m following as I create the blueprint for my business model:

1. Make clients pay well for your most valuable commodity — your time. I see many service business owners tying themselves up with (and tying themselves down to) far too many 1:1 clients. You have only so many hours in the day, and at some point you’ll hit the wall and not be able to expand the number of 1:1 clients you see. Sure, you can hire and train additional staff to handle the overflow, but in many cases, you make less money in this model while tripling your headaches. Make your 1:1 time with clients your highest-fee service, charging a premium fee to dispense your expertise.

2. Ongoing recurring revenue is key. Feast or famine seems to shape the life of the service business owner, regardless of industry. Wouldn’t your life be much more sane if you knew that you could count on recurring revenue each and every month, rather than having to constantly go out and find new clients? This was one of the models I adopted early on in my virtual assistant practice, i.e. working exclusively with clients on retainer rather than a “pay as you go” model. What is it that your clients need from you that you could provide on an ongoing basis with them that isn’t time-intensive for you?

3. Always have an upgrade. Never offer a stand-alone product or program that doesn’t have a natural tie-in to the next level of program or service that you offer. If there’s no way to leverage what you’re offering into some type of upgrade, don’t offer it! For example, a free teleclass can lead participants to enroll in a paid short-term group program. From that program, plan to enroll a certain percentage of those participants into a recurring revenue continuity program. You can then upgrade a percentage of these participants into a live event or small ongoing mentoring program, and from there make an upgrade offer to your premium 1:1 time.

4. Design the blueprint. Brainstorm all of the types of programs, products, and services you might offer in your business. Your list might look like the one below:

• Consulting
• 1:1 Service Provision
• Group Coaching/Mentoring/Continuity Programs
• Sale of Info Products –Private Retreats
• Strategy Sessions
• Live Events
• Speaking
• Information Products or Books –Licensing/Certification Training
• Teleseminars/Webinars
• Subscription Membership Web site

Pick 3-5 of these items that will make up your business model, and then determine what percentage of income you want to derive from each. Your total needs to equal 100%. Then, determine the order in which you offer the components of your program over the next 1-2 years. This becomes your blueprint for action.

How do you determine your success? If your business still suffers from feast and famine, take a long, hard look at your business model for the solution. Every offer you make in your business should flow seamlessly into the next, which will result in a steady, predictable income that you can increase over time as you become more expert at designing and following your blueprint.