RETURN ON INVESTMENT

In an ideal world, all your marketing campaigns would give you a return on your investment. Unfortunately, not only is that not that case but often it seems that getting a return is more of the exception than the rule.

KNOW YOUR NUMBERS

The one critical element to getting a return on your marketing investment is to know your numbers. What I mean is that for every dollar spent on marketing, you should know how many dollars you get back. This means that you should know things like your Cost Per Lead (CPL), Cost Per Sale (CPS) and the Lifetime Value of a client.

COST PER LEAD

The Cost Per Lead is different for each marketing campaign BUT it is something you should measure for each campaign. So what is the Cost Per Lead? Essentially it is the amount that you spend divided by the number of leads generated. So if your Yellow Pages ad costs $800 per month and it generates 8 leads, that's a CPL of $100.

COST PER SALE

Cost Per Sale is an even better number to know. You may be getting a bunch of leads and very few sales - not a good situation! This number is often a very good indicator of good your sales process is. We have found that with some of our clients their Cost Per Sale from Internet leads is second only to referrals.

LIFETIME VALUE

The Lifetime Value of your clients is how much, on average, each client spent with you. Why is this number important? Well, in many cases we have found that you can actually lose money on the first sale but, because the customers come back and spend more with you on subsequent occasions, it is still worth it. Knowing your Lifetime Value will give you a much better idea on how much you can afford to spend on getting a new client.