When I take on new clients, I always want to know where we are starting from. What is working, what isn’t, how many clients there are, what products are selling and for what price? Most people can answer this off the top of their heads. However, when we start to delve into the numbers a bit further, it seems people don’t have a good handle on the numbers.
One of the most critical questions to answer is the average cost of a lead and the average cost to turn that lead into a sale. It seems this figure always requires people to go off and do further research. I am not suggesting you walk around with spreadsheets in your head, but it is essential to have a basic grasp of these numbers if you want to grow your income.
I had a new client a couple of weeks ago who came to me for help in creating a new information product because he felt his current information product was not doing so well. I asked him for his numbers, and he had to go off and do some research. He is making about £900 in sales each month and spending £400 on getting these sales. It means that for every £400 he is spending, he is getting £900, a return of 225%. I don’t know about you, but I don’t know many opportunities that offer a return of 225% in such a short space of time. Therefore, if he spends £10,000, he will get £22,500 in return.
Instead of creating a new product, he has now upped his marketing budget, and I am helping him get an even higher return for his marketing spend. But if you don’t get a handle on your marketing numbers, you could be throwing money away or missing out on tremendous opportunities.
Why not take some time to look carefully at what it costs you to get a lead and what it then costs to convert that lead into a sale.
Perhaps you already have a product that could be like your own personal gold mine?