A Finance Guy Talks About Marketing

Here’s my definition of GOOD Marketing:-

A well thought through strategic approach to marketing planning combined with consistent follow through action on that strategic plan
AND THEN…..
Regular analysis of results in order to progressively improve the “current best thinking” on the business’s marketing.

The MARKETING OBJECTIVE being to drive the growth of PROFITABLE SALES.

My Strong Belief
Marketing spend MUST be an INVESTMENT not an EXPENSE.

Accordingly, an ROI should be regularly calculated for the INVESTMENT in Marketing.

Lifetime Value of a Client
This, of course, feeds directly into the ROI on Marketing.

An Example of “lifetime value” of a client.
In the early 1990s I hired a telesales agency to get me appointments with potential clients for my C.A. Practice.

The telesales agency charged me 50% of the ANNUAL RECURRING FEES on each new client I closed i.e. I would be charged, say, £1,000 on a new accounts and tax compliance client who would pay £2,000 p.a. of fees to my practice (£2,000 was around the average annual compliance fee in my practice).

THE ROI
Some of those clients stayed with me over 20 years (often until they retired or sold up).

So on one client paying my practice £2,000 of annual compliance fees, there’s at least £40,000 of fees over 20 years (ignoring fee increases).

At a GROSS MARGIN of say 60% that’s £24,000 of marginal gross profit on each of those clients
               AND
The better clients also purchased ADVISORY SERVICES in addition to COMPLIANCE SERVICES (Don’t under estimate the power of selling more services once Know, Like and Trust has been established with a client)

IN ADDITION : Every one of my most loyal clients brought me referrals/introductions  to new clients across the years…………further boosting the ROI on my initial £1,000 per client marketing investment.

Some Takeaways

**Pay Close Attention……………. take the time to do regular analysis of results

**Do the hard thinking on results…………… what is working? AND what is not working?

**Referrals are the best leads I ever got ………zero lead generation cost, they converted more easily and negotiated less on price.

**The “best” clients …………..broadly believed what I believed.
(Over time these “best” clients blurred the lines of client/friendship).

**To provide a preeminent advisory service it is necessary to “go the extra mile” for clients……….it’s so much easier to do that for clients you come to really care about i.e. who have blurred those lines between client and friendship.

**ROI on your marketing investment can be a moving target………… the longer you can retain a client AND ideally sell more services/products to loyal clients the higher your ROI will be.