Marketing spend. How much?

Marketing spend. How much?

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I really want to up my marketing spend. At the moment  I am overly tight on this area. This is to my deteriment. I am thinking to spend at least 5% (more likely 10%)  of my gross current fees on marketing.

I know there is no right or wrong answer. What do you do?

Replies (9)

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Stepurhan
By stepurhan
20th Jul 2011 08:48

How long is a piece of string?

It's not so much what you spend as how you spend it.

At a networking event I got into a discussion of this with a business coach. He told the story of a man who spent quite a bit of money on a large advert in the local paper every week. When asked how many clients he'd got from it, the answer was 1. That's not a good return on investment.

Going back to your segmentation question, you really need to think about what sort of client you are aiming for. Then you need to think about what publications or other advertising mediums that sort of client is likely to see. Then focus your marketing budget there. If you just throw money at every possible option, some of it will stick and get you clients but most will be wasted.

If you're still going ahead with the shop-front idea, some sort of active display in the window might be a good bet. a Powerpoint slideshow highlighting the services you offer would be a start. If you want something more complex and are in the South-East I can put you in touch with a company that solely deals with active window displays.

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By Steve Holloway
20th Jul 2011 09:01

10% would be a huge amount for me ....

 and I don't mean because I earn a lot! I am sure I could spend £6-£7,000 on marketing but I have no concept where I would start. Alternatively I could buy that 25year old Audi Quatro that is on ebay at the moment ... sounds much more fun!

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By petersaxton
20th Jul 2011 10:38

Wrong approach

Don't look at it in percentages.

Look at what you think will be good forms of marketing. Try them out. Do they work? If so consider spending more. If they don't work is it because you did something wrong or is it just that they don't seem effective. If you did something wrong change what you do and try again.

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By zarathustra
20th Jul 2011 10:47

Dont think of it in cash terms

If I were you I would have a read of a couple of Guerilla Marketing books. You will start to think about marketing differently.

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Teignmouth
By Paul Scholes
20th Jul 2011 11:46

Marketing is so much more than advertising and a website

Z beat me to it.  I did a business diploma several years ago and the bit that I thought was going to be the shallow boring bit, Marketing, turned out to be huge and fascinating and, when you think of it, is what holds together and drives a business. 

There's loads of good free stuff out there that will spark thought processes but what I got from it was that, unless you have identified a niche group of potential clients or a new service, then you are better of marketing to existing clients in order to generate more business with them or through recommendation.  In addition, once you start employing other people, the marketing needs to include them as well, ie letting them in on it, getting their views and allowing them to do it.  All this costs is your time and brain cells and getting to know what each of your clients want & need and tuning your business to satisfying that (if you can).

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By Steve McQueen
20th Jul 2011 13:52

It depends where in your practices life cycle you are...

... at the begining, the % I spent was huge (probably several '000 % of GRF) but as I grew, the amount both proportionately and absolutely fell as I didn't need to spend as much.

A better measure IMHO is to look at spend as a percentage of growth in GRF. If you spend £30k in a year and grow £100k, its 30% of fees, which compared with an acquistion (100-110% of fees anyone) is dead cheap. Throw in the averge life span of 7 years and your £30K spend will earn you £700k so its positvely free!

Also, at a point you won't be able to grow as quick (I ran out of money and sources of money to finance the lock up / WIP of a the business and so sold up) and so will seek to scale back what you do (and what work for you can only be determined by you) when you get to that stage.

In my experiance the total cost of growth (including lock up) was always around 50p in the £1.

Steve

 

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By Bob Harper
20th Jul 2011 21:05

Lifetime value not GRF

@FirstTab - wrong question, think in terms of cost of acquiring a client as a percentage of lifetime value, not fees. That will give you immediate leverage over your competition.

When you say marketing, I assume you mean investment in lead generation after investing in first class design, Website and collateral? But, it really depends on your strategy and use of no and low cost lead generation tactics.

The more niche/specialist you are, the stronger your value proposition is, the better you are at PR and Social Media the less you will need to invest in money. Marketing today is more about time and creativity; it is not just about the money.

@stepurthan - how long is a piece of string, twice as long as the distance from the middle to one of the ends.

@Paul Scholes - I agree, why look for new clients when there is loads of business sitting in the client bank?

@Steve McQueen - good answer which summarises the typical experience of many firms that used telemarketing - was that your key tactic?

Bob Harper

Portfolio Marketing
 

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FT
By FirstTab
23rd Jul 2011 10:28

Okay not anything and everything

Thanks for a helpful response. When I started it was spam snail email to anything and everything. At the time that was what the franchsior suggested. This was backed up by telemarketing - "have you received our letter...?".

This did work and  purely through chance I gained some good clients. At the same time, time was taken up in wasted appointments. I think starting with zero clients this approach was right. Reading the response, to carryon with this approach would not be the best way forward.

Bearing in  mind like most accountants I offer a local service. This means if aim for a specific industry there is not much I can go on. This means I may go on turnover levels. This way I avoid the just the tax return jobs and hopefully get some reasonable fee level work.

When you offer a local service you cannot be so targetted?

Thanks

 

 

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By Ken Howard
23rd Jul 2011 10:49

What about "free" marketing?
Just out of curiosity, how much new business are you generating from your existing client base? How many clients are referring their friends, family and business contacts? How many have you converted from low fee to high fee by offering more services? None of this costs you a penny.

My annual marketing/advertising spend is a joke - it won't be more than a couple of hundred pounds including website domains. In the past I've spent thousands and didn't really see a better return than from internal growth. Before the marketing gurus shoot me down, yes, I didn't do it properly as I didn't really want to grow too much anyway and I know the money spent could have been used in far more effective marketing methods, so let's not go there.

I'm still seeing plenty of new clients and increasing the scope of work for existing clients. I've kept a kind of "family tree" showing who clients have been referred from, and it's fascinating reading to see just what stream of clients can follow from an initial referral. I have a couple of long standing clients where the referral stream from them and their referralss' referrals amounts to almost half my GRF, so if I hadn't got those two clients ten years ago, you could argue my practice would only be half it's size (in very simplistic terms!). Those two clients are absolutely priceless to me and both came from very "cheap" advertising at that time, not fancy marketing.

Only this last week, I've converted a client from £1,860 GRF to £4,140 GRF with virtually no effort at all. Just a quick meeting, a couple of new ideas on the table, and Bob's your uncle! The week before, I regained a long lost client who'd given up s/e and got a proper job about 8 years ago - when he came back s/e, first thought was me, and that's another £1,332 GRF just because he could easily find my simple website from a google search of my name - that's a free website I maintain myself at no cost other than the domain renewal.

If you want to grow quickly, then of course you have to market strongly, but don't concentrate on getting new customers - it's just as important to keep your existing ones, treat them so well that they bring referrals to you and come back again if for any reason they leave you. That's just as valid marketing and is free.

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