You’ve heard that cliché often enough, haven’t you? Most of us have, but it’s amazing how many seem to apply it as: Fire, Ready, Aim…what the hell just happened?
Let’s talk about how this should actually be applied.
Getting READY is really all about figuring out the best STRATEGY first, before you implement any TACTIC.
The best way I’ve found over the years to get READY, is to develop a campaign budget that focuses on delivering profit – not leads.
As you develop the budget, determine all your fixed costs even before you figure out what ‘tactics’ you should use to generate profit. Remember, it’s not the lead cost we’re interested in – it’s the value of the leads we generate that’s more important.
Determine your fixed costs first to give you the platform to build on to determine your tactics.
Once you’ve got the fixed costs settled, then you can consider the different tactics you might employ, and their associated product and marketing costs, sales conversion rates and average sales values to determine their respective MCOS.
Once you’ve determined your overall Cost of Sale for each TACTIC, you’ll know which one(s) are worth testing.
As you can see part of getting READY is to be sure you’re AIM is focused on getting the best profit. That means you need to decide who your target market is when you’re considering your tactics.
Once you’ve determined the CLV segments and cluster groups you want to target and the tactics you use, you’ll have figure out the maximum cost you can afford to acquire customers from those prospects that most closely resemble your best customers.
So, now your campaign budget and tactics have been decided and it’s time to FIRE. However, before you pull the ‘trigger’ make sure you’re assumptions are realistic. Because if they’re not, at the end of the campaign, someone is going to ask you – What the hell just happened?
And when I say be realistic, this means to be sure that you’ve included all the costs associated with the campaign accurately and that the corresponding revenue is realistic. All too often, people forget to include all the costs involved in making a sale. And more often, people are too optimistic in their sales projections.
Beware of spreadsheets; they’ll give you any number you want! Hey, we’re only human and under a lot of pressure to get something out there to get those sales!
Get some insurance. The best way to do that is to run your campaign budget and projections past the ‘bean counters’ in your Finance Department or your Business Analyst. If you’re a SME, use your accountant, that’s what their there for!
Once you’re as sure as you can realistically be – FIRE!
Then, Track Everything!
Track everything that happens and compare it to your budget each week, month and quarter. Not everything you thought would happen will happen. Some things will be better than what you expected and other things not.
By tracking actual results and comparing them to your projections, you’ll learn what’s working and what’s not working. Maybe, you only need to apply a few ‘tweaks’ and then move full steam ahead. Perhaps, you need a major overhaul on your tactics.
Either way, track everything so you can zero in on what needs to be improved. Then fix it. Lead generation is a marathon, not a sprint; you won’t hit every campaign or tactic over the fence.
On a side note:
Quite often I’ve found many of the production elements in my projections were a little off target, and sometimes way off target! Things like booking %, show rates, sales conversion rates, average sales value etc. Interestingly enough though, although some of these elements weren’t what I’d expected, many times these elements still seemed to interact with each other is a way that delivered the Cost of Sale I was after.
Don’t be surprised if that happens to you, too!