In today’s lesson I want to talk about one of the most common traps for business owners.This trap is easy to fall into because it tricks you into thinking you are growing your business.
And it’s only after you carefully look at the numbers that you realise you are missing out on a huge chunk of potential profits.
What is this trap?
Focusing too much on the ‘front end’.
Let me explain…
Marketing materials that get new clients for your business are called ‘front end’ offers. They are incredibly important.
That’s why I share dozens of strategies to help you do that throughout this program.However, in today’s competitive market, running only ‘front end’ offers may not be enough.
If you run an ad for $300 and it gets you 3 clients, you have paid $100 for each client. This is fine if your average client pays you $200…
But if your average client pays $100, then you only break even… and unfortunately break even doesn’t pay the rent.
That’s why you must use the ‘backend’ marketing strategies in this program,like arranging follow-up cleans, asking for referrals, and offering different services.
TODAY’S TASK: Know Your Break Even Point
One of the most important things to understand in business is your break even point for marketing campaigns. This is the point where you start profiting from a client.
- Keep a record of your marketing campaign costs.If you spend $300 mailing a letter to clients, your cost is $300.
- Track how many clients you get from the campaign.If you get 4 clients from the campaign, your cost per client is $100.
- Track how much money you make from the client and when. If your client pays you $60 for the first clean and $60 for the second, you know that you must do two cleans for that client if you want to make a profit.
This is very valuable information and allows you to measure whether a marketing campaign is worth running or not.