How do I reduce my promotion costs?

I have had a clients ask?

How do I reduce my promotion costs?

I can understand the question.  It is important to stay within your resources. I can see where it comes from. In traditional accounting principles, everything has a budget line and the plan is to stay within the lines.


This is a limiting concept and it creates average companies that bring in average profits.

This tight budget approach is based on borrowed money and moving into quick profit, it comes from the money lending mentality of the last century. Banks like to see budget lines in a project that lead to the repayment of the loan.

Thankfully this thinking has changed, and many well-funded corporate projects have what they call a burn rate.

The burn rate offers a more flexible approach. The technique frees you from the tyranny of the question because to build a business the question needs to be reversed.

The question is not:

“How do reduce my promotion costs?”


How much money do I need to spend to get a customer and move into profit?

If you knew that spending £1.00 would return £5.00

would that be a good investment?

When the numbers look like this it is not about saving money but spending more.  Getting to this point is dependent on many factors. Know your numbers, like the transaction size and frequency and lifetime value of a customer. Primarily it is a technique that requires you to track and work with information that allows you to determine its value.

Looking at an example …. lets

–  place an advert in a magazine, cost £300.

–  The result is 5 telephone calls and 2 orders the total value of sales was £300.00


–  if we’re buying those phone calls they cost £60 each and it was £150 for each customer.

–  We lost money on the cost of the goods,


–  broke even on the cash spent


–  gained the contact details for 3 prospects and 2 customers.

That was looking at the immediate result.  From that perspective, we can see that the sales did not cover the costs. However, you have the contact details and continue to market to these 5 connections over the next year. With the result of 2 new orders and one repeat order. Total new sales are £450 plus £300 from the first sales.

That £300 has now generated £750 of sales in just over 12 months

Another year on with more marketing, there are 2 more repeat sales and another new sale, that is another £450

This brings our total income from £300 to £1500.  Wow, that took 2 years but look at that a 5 to 1 return.

This is simplistic the numbers are fake.  In reality, the returns are more like 1:1.5 and dependent on many factors, there are lots of variables to get this working. Yet returns like the above example are possible.

Also, magazine advertising would be expensive, and the responses are variable and difficult to track. However online tracking is much easier with Google or Facebook advertising and email marketing.

What I am talking about here is the development of a process called a sales funnel, when you know a customer will spend £1000 with you over 5 years and more over ten years it is just a matter of deciding,

  • How many of those customers do you need to build a thriving business.
  • How much can you afford to pay to buy one customer

Sales FunnelThe point is prospects come in at the top but they leave through the side of the funnel if what you are offering is not relevant to them. You have the opportunity to offer something else and divert them to another funnel. The ones that arrive at the bottom are customers. This is a powerful process and lets you decide how your business grows.

Building a sales funnel is a process and will take an investment of time, it is quicker and costs less using online tools. Once created it will put your business in the fast lane, where you are looking to spend more on promotion. You choose how many customers you need and how big your business gets.

If you have a successful business you already have a funnel and may not be aware of it. If you want to improve your processes, start testing. If you want support with that complete the 20 minute free review form, I will get back to you and we will see what is possible.

To your success

Paul Harvey

Why Advertising does not Work

Paul HarveyWhy Does Advertising Not Work?

I had a call with a prospective client a while back; they were spitting bullets. The first thing they said to me was. ” Why advertising does not work”.  A few weeks previous they had been approach by their local newspaper to appear in a feature at a special price. Only to find on publication that all of the competition was give the same deal for the same page. It was harsh seeing hard earned cash spent just to sit in a crowd, and worse when the phone did not ring.

The only way to make newspaper advertising work is to have a real budget and be in it for the long game, dipping in and out is not an option. Without continuity there is no proof it works, also include an offer that is unique to the paper so you can track responses and always ask your prospects how they found you.

Here are some key points to consider before using print advertising:

1) Are your customers reading the paper?
2) Buyer frequency, will the readers buy often enough?
3) Does your product or service sell at a high enough price to return the cost of advertising?

If you can answer yes to 2 of these and you have the budget, it may be worth a try. Look to cut a deal and commit to buying a years advertising. You should be able to get a killer price that slashes the rate card.

Can you stand out from the crowd?

Whatever you do the advert must stand out from the crowd with a point of difference.

When you become part if the herd, do the same as the competition, the product becomes a commodity. Unless you can present a unique aspect of the product a twist on the service, a strong call to action, You just blend. Think what will make this stand off the page. . The problem is that very few businesses take the time to find a unique position, a platform or point of difference. So failing this the default is price, and it all becomes a race to the bottom.

Price is an old story here is what Sergio Zyman, former Chief Marketing Officer, Coca Cola had to say on the subject in 1999

“Because old marketing isn’t working, every year, earlier and earlier in the marketing year, people are admitting defeat and falling back on ‘Plan B,’ which is, of course, price promotion. Price promotion is definitely on the rise, and the cost of it is going up. That’s because when everyone is cutting prices, you have to cut yours even more. The sale that cost you a dime to get three years ago, now costs a quarter, and still, all you are getting is rented volume that is going away as soon as you stop paying for it.

“Every day you can turn to the newspaper’s business pages and learn that another company has succeeded to death. It has sold a lot of stuff and gone broke in the process.

Integrated Marketing takes you beyond the uncertainty of print advertising

In the example at the beginning of this piece, you could argue that the newspaper was serving their readers well by collating all of the players in the market and putting them all next to each other for easy comparison. Is this any different to the online world on a Google search, where we all appear next to our competition in the organic listings

Why does advertising not workIf Sergio Zyman thought it was tough in 1999, I wonder what he would make of our marketplace today, with mobile, the web and social media. The fact remains that we live in the world of the marketing maze, where the integration of marketing channels is the key to survival.
To my mind, the small business must develop a marketing machine that uses a range of lead generation tools and channels.

It is the first place I look when starting with a new client, how many marketing streams are they using, are they testing. I am all for the local and provincial press they provide an invaluable platform for local issues. But as an effective marketing tool for small business?  It can be but only as part of an integrated marketing system.

To Your Success

Paul Harvey

No More Free Google

Google is everywhere and it was once the champion of the small business,  now they are starting to suffer as the big G tightens its grip on everything online. There is no more free google.

Google Doodle
Google Everywhere


I am a big fan of the tools and products that make my life in marketing easier both on and off line. But recently I have begun to wonder just how powerful is google going to be.



The truth is they detect your every mouse click. If you do anything on line the google gods will know. Either through the use of the chrome browser, the search engine or the analytics widget buried on most web sites. Then of course there are the Google cookies that get picked up on your machine as you surf the web. Internet privacy is a big hot  topic and I am not looking to join that debate. I am looking at how difficult it is becoming, to stay on the right side of the big G.

The point is to stay on top in organic search results it is about so much more that just having a great web site. You have to build a destination on the web and more important other people, your visitors have got to agree. By staying on you pages and sharing the content.

Google has very clear objectives and that is to create the perfect search engine, one where the visitor finds the result they want with the minimum of distraction or false searches. Once this goal was about organic search ( the left of the screen ) and on the whole this is still this is still true. Particularly in non commercial markets.

As people became better at meeting the criteria for a top slots many found ways to legally game the system and Google had to respond. They have in recent years applied numerous updates to filter the organic search this removed the cheats, at the same time it took many a legitimate company out of the listing for unknown transgression of the new rules.

Another growing factor is the dominance of the sponsored link, it is starting to challenge the once sacred organic space, is this the google search for greater profits.

Search Image

This is a very competitive market for Credit Cards but look everything above the fold is a sponsored link. If you are in a competitive market this could be the face of things to come leaving you with no option but pay up and join the herd.


Google is still saying user results are important and they implore us to build better web sites with fresh new content that inspires our visitors. You can do all of this and still get no visitors. The truth in 2013 is that to get anywhere in online search you have to do so much more than just have good web site. The bottom line is you will have to build reputation and prove you are worthy of your slot or pay in money and time to make it happen.

If you are just coming into the online world it is a mountain to climb and hopefully you know what you are getting into. My heart goes out to those well established businesses with good web sites that once had a top slot. Falling foul of the new updates, they now face a slow climb back to top using a multiple of channels to prove their worth or they join the herd of sponsored links and buy the relevance they once got for free.