How do you predict future sales? And how, in turn, do you budget for the marketing campaign that will drive increased sales? There are a few rules of thumb that will help you plot for growth.
History is the best and safest indicator of the future. If you've seen consistent sales over the past few years and you want to remain at that level, then the marketing budget you'll need is predictable. If you want to grow, what you'll need to spend on marketing is far less clear. But it's better to plan for extra funds, so as not to be disappointed in the results.
You can translate certain key indicators into future marketing costs. Look at leads and cost per lead. If you want to substantially increase your sales, you not only need more leads but you'll likely need to increase your cost per lead. Also pay attention to close rates, average sales size, lead sources. If you want to boost your sales and most of your business is through referral, you will need to spend money on other marketing efforts to complement referrals.
The last rule of thumb is that growth will cost you in the short term. It takes money to hire and train people. The key to good marketing, and to growth, is to invest the time to create a plan and then monitor progress weekly.
--Mark Richardson is president of Case Design/Remodeling, Bethesda, Md. (301) 229-4600, [email protected].
