One of the most valuable things you can do for your business each year is create your marketing plan based on realistic numbers – and that process includes defining your strategy, setting goals, and putting together a budget.
It’s not too early to start planning. Large companies have already been working on their strategic plans for a couple months.
Even if you’ve already spent time planning out your 2021 goals, most people forget about one very important element. Without it, your plans could fall flat. Here’s how to make sure that doesn’t happen to you…
So what’s the number that most otherwise-smart business people often forget to look at?
For the sake of argument, let’s suppose you’re aiming for $1,000,000 in annual revenue growth for 2021.
You can’t just take that million-dollar number and run with it. You also have to know your annual customer spend and your attrition rate, and factor both in.
Once you do that, your real goal number will be much higher than $1 million.
How to Calculate Your Real Goal Number
In any business, your customers might:
- Use your product or service once or twice, and then disappear into the wild blue yonder…
- Decrease their level of spending with you…
Which of the three most likely applies to your business? Well, the simplest number to use is the number of out-and-out cancellations.
For the sake of easy numbers, if you had a $2 million business with a 25 percent cancellation rate after the first year, you might need to replace $500,000 of lost revenue in addition to your planned increase of $1 million. In other words, your goal should actually be an increase of $1.5 million.
If your current marketing plan will only generate $1,000,000, you need to close that gap somehow.
Will you seek customers that spend more on your products and services over the next year? Or can you figure out how to slash attrition?
3 Reasons People Quit Buying Your Product or Service
It’s important to remember that there are really only three reasons people quit buying from you:
- There was an interruption in their life, and by the time it was resolved, they’d forgotten about you.
- They no longer need your product or service. For 25 years, I owned private piano studios. There was an average student lifetime value, and it generally ended when a young student entered 8th or 9th grade. It was about as predictable as the sun coming up.
- They were dissatisfied for one reason or another.
Go after those who left for reason No. 1 or No. 3. The first group might just need a reminder. Find out what the No. 3s weren’t happy about and resolve it.
You probably won’t get many of the 2s back. Maybe they moved out of the area. Quite likely, they just outgrew their need for your product or service.
Be sure to include the 1s and 3s in your marketing plan. No matter what your business, know their ‘inactive’ point and contact them sooner, not later.
If you own an organic food shop, customers’ ‘inactive’ status probably kicks in within four weeks. If you’re a dentist, it’s eight or nine months, i.e., after they’ve missed their 6-month checkup.
I recently returned to my dentist after missing visits for two years – having skipped out because of a move out of state. Never heard a word from them in the entire two years. Don’t make that mistake.
Win Back Your “Lost” Customers
‘Lost’ customers are often the easiest to win back. So plan a marketing campaign specifically to bring them back. Allocate a budget for it. Don’t leave them behind in favor of the new shiny object, even if it’s new customers.
Then plan for your new client campaigns. Put some cushion in your budget. Not every plan will turn to gold.
This is especially true if you use online media. Rule changes are almost a sure thing, and they could destroy an entire online media campaign.
From there, you can create monthly and quarterly milestones and map out your campaign start and end points.
You’ll still have to back it up even further, because campaigns need to be written and planned. Do you have the people on your staff to do the job? If not, how will you locate them?
Here at Carol Parks Marketing, we’ve helped create winning campaigns and strategic growth opportunities for companies for the past 13 years. Is now the time to work with us?