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Why Your Need To Know Your Numbers When Developing Your Marketing Plan

When measuring the success of a marketing plan a lot of business owners make the mistake of only focusing on website views, social media likes, and new leads. Don’t get us wrong, these key performance indicators (KPI’s) should be measured and reviewed regularly BUT to ensure that you are heading in a truly profitable direction you need to take your marketing and sales planning a step further. Talk to your bookkeeper or accountant to figure out how to accurately measure the following data so that you can use it to drive your marketing strategy.

1) Measure The Net Revenue Of Target Audience

Knowing the net revenue of each client will help you accurately determine who your most profitable clients are, which clients (if any) are costing your business money, and who you should be targeting with your marketing and sales efforts. It’s easy to make assumptions when it comes to client profitability and use these assumptions to drive your sales and marketing efforts.

For example: Henry owns a construction company with 3 key target audiences – New developments, luxury home renovations, luxury home builds. He made the assumption that new developments are his ideal target audience as they are long-term contracts, their invoices run into the millions and they allow him to build and maintain a large team. Reviewing his true net revenue by target audience revealed that after labour costs, overtime, materials, project management costs, accounting, office management, legal fees and delays that this target audience wasn’t as profitable as he originally thought and that his renovation clients were actually more profitable on average.  

While there may be times when your assumptions are correct we always suggest trusting your numbers rather than your gut when making strategic marketing decisions.

2) Know Your Client Acquisition Costs  

How do you find your clients? What is your cost of advertising to each target audience? How many hours a week do you spend on marketing and sales? How long is your sales cycle? How much time does each marketing activity take? These are all questions you need to know the answers to so you can determine which clients are worth pursuing and which marketing efforts are the best ones for obtaining them.

For example:  Sally owns a yoga studio and to attract her ideal client she advertises on Instagram & Facebook, writes one blog a week and spends 2 hours a week networking. On average Sally brings in 6 new clients a week who purchase the introductory class offer which is $40 for the month. Out of the 26 new clients per month, only 5 continue on as annual members after the intro offer expires.

When Sally breaks down her time and costs and income it looks like this:

Social Media Advertising – $600 per month – Brings in 15 clients per month = $40 per lead

Writing a weekly blog – 10 hours per month x Sally’s rate of $60 per hour = $600 – Brings in 3 clients a month = $200 per lead

2 Hours of Networking – 8 hours per month x Sally’s rate of $60 per hour = $480 – brings in 8 clients a month = $80 per lead

Total marketing = $1680 per month

Total income from the months marketing efforts = $1040 for month one, $600 for month two

So for each month of marketing, it takes 2 months for the efforts to break even and the average cost per new lead acquisition is $65.

Sally dives deeper and realizes that the clients who are most likely to continue after the introductory offer are women in their 40’s who have back issues that she targets through her Facebook advertising and people she has built a personal connection with through networking.

Looking at the numbers Sally determines that writing her blog isn’t worth her time and puts that money into social media advertising. She spends more money targeting the demographic that is most likely to continue on an annual membership and as a result, triples her monthly leads. Her cost per lead is reduced significantly, her revenue has increased and she has saved herself 10 hours a month of writing tasks.

Without diving deeply into your marketing efforts and measuring the ROI of each effort you won’t be able to streamline and improve your marketing strategy and long term revenue.

 

3) Know Your Customer Lifetime Value (CLV)

It’s widely known thanks to Pareto principle that 20% of your customers generate 80% of your revenue. This is why knowing your CLV is so important. This metric is an easy calculation and essential number to know when reviewing your retention strategy and determining your future target audiences.

To calculate the lifetime value of a client simply add up the gross profit they have brought to your business over the course of their time as a client. In addition, it’s beneficial to note the length of time they have worked with/ purchased from you and if known how they found your business.

You can use this information to create target audience personas that are based on your most profitable clients for marketing purposes, to help with the creation of client appreciation campaigns, account development, and retention plans and to predict your future revenue.

For Example:

Jennifer owns an e-commerce business and spends a lot of money marketing her products on social media to attract new clients. Once Jennifer started measuring her CVL as a key metric she was able to determine which campaigns were the most profitable long-term, cut the campaigns that were only bringing in one-off clients and build stronger nurturing and retention campaigns to keep customers who were loyal to her store coming back, increasing her overall revenue.

In this new era of online marketing what was once thought of as a creative, whimsical industry filled with fun swag and events has turned into a data-driven almost scientific one that relies heavily on the bookkeeping and accounting industry.

To ensure that your small business continues to grow successfully you need to make sure you talk to your bookkeeper or accountant to solidify that your growth strategy makes sense and that your marketing spend is bringing you the right ROI.

Canada Day: Stat holiday pay. Are you eligible?

Vancouver Bookkeeper(s), Quickbooks, stat holiday pay, stat pay, holiday pay, Tax Return Service Vancouver, Small Business Bookkeepers in Vancouver, Canada Day, Happy Canada Day

And it smells groovy….

Fireworks, road trips, bubbles, smiles and fun. The long weekend is almost upon us with Canada Day celebrations at every corner.

So before you lock up the office to celebrate Canada’s big 150th this long weekend let’s figure out if you are eligible for statutory holiday pay.

In B.C., an employee is eligible if they’ve been employed for 30 calendar days before the stat holiday and have worked or earned wages on 15 of those 30 days. So if your employee, Susie, began work on June 1st and has worked 15 days since June 1st, she gets paid for Canada Day, whether she works on Canada Day or not.

Eligibility is determined by days worked, rather than hours, meaning it applies to both full-time and part-time employees, although the 15-day stipulation rules out most part-time employees.

At Homeroom, if we’re taking care of your payroll, it’s up to you to tell us which employees are eligible or not. This policy might vary from bookkeeper to bookkeeper, so make sure you know!

If you’re taking care of it yourself, here’s how you’d figure out Susie’s stat pay for Canada Day. Take the total hours she worked in the 30 days before the stat holiday and divide it by the number of days worked, then multiply by her rate of pay. Let’s say Susie worked 60 hours in 16 days and earns $25 per hour, she would be paid $93.75 on Canada Day (60/16 x 25 = 93.75).

Now let’s say that Susie is a keener and she agrees to work on Canada Day. Eligible employees are paid time-and-a-half for the first 12 hours on a stat holiday. This is in addition to the stat pay that we calculated in the previous paragraph.

However, all this changes if your employee worked less than 15 days since June 1st. In that case, they’re not eligible for stat holiday pay and if they work a stat holiday, they’re paid as if it were a regular work day.

In B.C., there are 10 stat holidays: New Years Day, Family Day, Good Friday, Victoria Day, Canada Day, B.C. Day, Labour Day, Thanksgiving Day, Remembrance Day, and Christmas Day. As an employer, you can choose to give more, such as, Easter Monday or Boxing Day, and can work out a custom agreement with your employees for these days.