Marketing Secret #89 MARKETING PLAN
We’ve spent a lot of time talking about getting leads, and now we need to discuss the foundation for everything you do in this business.
Yes. You have all heard this before. But you are going to hear it again. The absolute #1 reason business professionals fail to reach their goals is because they don’t have any!
That’s right. You heard me. No goals!
I know, you all have the goal of “becoming rich”, or “wanting to make $10,000 a month”, or whatever. And, these may seem like goals, but they’re not. They cannot be for one very important reason: There is no plan to go with them!
Over the last few years, I have discovered that an incredibly high percentage of us have no specific plan for ourselves.
Probably because we are so busy trying to make a living that we bounce around from one place to the next. We are always worrying about our current/ previous profits so much, that we don’t stop to take the time to plan for our future profits!
You have landed here for a reason. And I’ll bet it has something to do with your desire to make more money! Right? Okay. Let’s start from the beginning and talk about a marketing plan for you.
Now, I have to tell you that I do not believe in those long range, five-year plans. You know, the “Where do I want to be five years from now?” type. I think that you have to have more of a focus on the next six to 12 months.
Let’s start with some income goals. This number will vary based on your business and how much profit you can take out of it. For example, if you have a business that sells fish, and you are on a 20% profit margin, you might want to think in terms of net, not gross, income.
I know that your accountant only worries about gross, but I find it to be very helpful to exclude the portion you give back to the company. It is kind of like setting the clock ten minutes fast so you will “be fooled” into being on time, but it does work.
I find that by overstating your income, referring to it in gross numbers, has a bad psychological effect. You can easily kid yourself that you are doing better than you really are!
Think about it. Saying to your spouse, “I grossed $11,000 last month”, sounds a lot better than saying, “I made $5,500 last month.”
The danger is that, not only can it sound better to someone else, but it might start sounding better to you! Always, always, think in terms of “net to yourself!”
As you think about this goal, please be realistic. Your net income goal will have to be changed all the time, so start with a number that is going to work for now. Since you will be adjusting your plan regularly, you can stay on top of this easily.
I want to use a fictitious business owner, Sam, as our example to walk through.
Sam owns at a small fish store and has been in the business for four years. He has been grossing about $18,000 a month; he’s operates on a 20% profit margin, and he pretty much gets his business from people who live in the local neighbourhood.
When Sam starts to plan, the first thing he needs to do is recognise that he is making about $3,600 a month. That is his net. He wants to double that figure over the next six months, and I don’t blame him!
Where to start? The first thing Sam must analyse is how much money he is making on each customer. This number will be calculated by dividing his income by the number of transactions.
Sam figures out that his average is as follows:
Annual gross income: $216,000
Number of transactions: 4320
Average gross per transaction: $50
Average number of customers per month: 87 (Not taking into account repurchases)
Now that Sam knows what his average sale is (assuming, for the sake of discussion, he hasn’t learned the above-mentioned points yet), he can see that he is averaging 4,320 transactions per month. This may seem obvious, but most people I talk to don’t really know how many transactions they get for a given period.
Sam sees about 87 customers a month. Most likely, at least half of those customers are repeat buyers. Meaning that they buy more than one time a month. It would be to Sam’s benefit to know exactly how many of his customers are repeat buyers, however for this example, we are just going to count each customer as a once a month buyer.
In order for Sam to increase his income to $7,200 level he wants, he is going to have to get twice as many customers as he’s now getting. S pecifically, he needs to get the number of customers up to 174 per month.
Now it is time to start writing down this plan. It doesn’t have to be anything fancy. As a matter of fact, the sample on the page following the text of this section is a totally simple marketing plan.
It doesn’t have to be fancy, just usable! Each week as we review and update the plan, we make a fresh sheet for that week.
What we have accomplished is a specific game plan for the week, and the near term. Earlier versions of these weekly plans had lower goals, and lower dollar amounts. They got higher as we reached the previous goals.
Even though the dollar amounts may be a little bigger than what Sam is doing right now, the theory is the same. He has to get specific, write it down, and stay on top of it!
Now Sam has something to work with and for. Nothing extravagant, nothing complicated. But you know what, this works!
Now I’m going to give you another way to look at the simple formula that you all must do for yourselves and it goes like this:
- Write down how much money you want to take home every month; e.g. $10,000.
- Add to that figure whatever expenses you have to pay such as rent, salaries, inventory, and any other expenses: e.g. additional $10,000.
- Total revenue needed to produce the desired income, add A and B, $20,000.
- Figure your gross profit per client/customer/patient; e.g. $2,000.
- Number of clients/customers/patients needed to reach number C, 10. Divide C by D.
- If you have to sell, divide number of clients/customers/patients obtained by closing percentage; e.g. if you close 50% of prospects to clients, in order to get 10 clients, you would need 20 appointments.
- If you have to sell, divide number of appointments needed by cancellation ratio, etc; 20 appointments, divided by half cancellations (50%), equals 40 made appointments.
- If you have to sell, calculate your conversion ratio; e.g. if you make appointments with 15% of your prospects, you would need 267 leads to make 40 appointments.
- Now, you make a list of your marketing activities, estimate the number of leads or referrals you’ll get from each one, and make sure you do enough of those every month to have 267 leads or referrals contacting you; e.g. if your ads produce 100 leads, and you get 20 referrals, and your seminars produce 50 leads, and your client/customer/patient functions average 25 leads, and you work with 20 existing clients/customers/patients, and 65 leads from public reactions’ free ads, you’ve got your system!
Think about this. If you do this little exercise, establish the activities through testing and getting a handle on the number of leads or referrals they generate, do the correct number as described above, then all your problems are solved.
You know that if you get 267 leads or referrals every month, you will get 10 clients/customers/patients a month and if you get 10
clients/customers/patients a month, you will make your $20,000.
I know this makes this to boring. I know this makes it too simple. But as I stated earlier, this isn’t hard. In fact, there’s nothing easier. So let’s summarise by looking at the recipe.
We throw in a little dedication to system thinking, sprinkle in a few teaspoons of free or low cost marketing and follow up, solidify it with a “working backwards” marketing plan, and voila, you’ve got a dependable, stress free, fun, profitable business.
I hope this recipe is one you can follow and start working on today. Not tomorrow, not next week, not next month, today.
I have seen many businesspeople double their incomes in way less than a year by using a simple plan and a coordinated implementation of
The single most important way to start doubling your income is to plan!
Some of you may be saying, “That looks like an oversimplification of how to do a marketing plan. I learned much more sophisticated methods in MBA school and can prepare a much better plan than that piece of paper!”
Yes, you probably can write a plan that would make any venture capitalist proud. That is nice, but it has nothing to do with making money for yourself.
If you were going to try to sell your business, or raise money from investors, then you would have to go to the well for MBA stuff. But not here. Not for a regular, periodic plan for yourself. I have seen countless attempts at these gorgeous plans that never get implemented, because they are too much of a pain in the butt!
What good is a plan that is so complicated it never gets done? These little plans will serve the same purpose but have the extra added feature of being “user friendly!”
Here’s a blank ACTION PLANNER FOR YOU TO USE:
- Write down how much money you want to take home every month: $______________
- Add to that figure whatever overhead or expenses you have $____________
- Total revenue needed to produce desired income, add A and B, $____________
- Figure your gross commission/income per new client/customer/patient: $____________
- Number of clients/customers/patients needed to reach number C, Divide C by D ______________.
- If in sales, divide number of clients obtained by closing percentage: e.g. if you close 50% of prospects to clients, in order to get 10 clients, you would need 20 appointments. Closing % ___________ divided by # of needed customers _________ = number of new appointments/meetings/visits needed.
- If in sales, divide number of appointments needed by cancellation ratio, etc 20 appointments, divided by half cancellations, equals 40 made appointments. Cancellation ratio ____% divided by needed appointments/meetings/visits= number of necessary made appointments/meetings/visits.
- If in sales, calculate your conversion ratio; e.g. if you make appointments with 15% of your prospects, you would need 267 leads to make 40 appointments. Number of necessary made appointments/meetings/visits ______ divided by the conversion ratio __________% = Number of leads required ___________
- Now, you make a list of your marketing activities, estimate the number of leads or referrals you’ll get from each one, and make sure you do enough of those every month to have 267 leads or referrals contacting you;
Ads produce ______ leads, and
You get ____ referrals, and
Your seminars produce ______ leads, and
Your client/customer/patient functions average ______ leads, and
You work with _____ existing clients/customers/patients, and _____
leads from public relations’ free ads.
You’ve got your system! (Of course, substitute or add any other activities as necessary!)