How wealthy business people get wealthy

Wealthy business people get that way because they know which marketing to do, and which to stop. WHAT ABOUT YOU?


Try answering these four questions!

Question One:
You own an electronic appliance store - at a rough guess, 50% of your business comes from Wellington and the other half from Palmerston North. But most of your $50,000 advertising and marketing budget is spent in the Wellington area – you do very little in the Palmerston North area.
Is your Wellington Advertising and Marketing working?

Question Two:
You own a car dealership. About 60% of your turnover comes from repeat business – people who have already dealt with you once before. About half of the new customers say they have come because someone told them they should. But 95% of the money you spend on marketing and advertising is to the general public in newspaper, radio and magazine ads.
How much of your marketing and advertising budget are you wasting?
Question Three:
You own a Law Practise. You do little or no real marketing. About 70% of your turnover comes from conveyancing, 20% from ‘family law’, 8% from ‘one off work’ but only 2% from criminal law.  Your senior people tell you that although you are “getting more conveyancing work than you can cope with” – there is a huge opportunity to spend some money on marketing to increase income from criminal law.
What is the percentage growth potential in criminal law for your business?
Question Four:
Look again at question three (above).
What percentage of your marketing budget should you spend to generate more conveyancing work?

Scroll down to read the answers

 

Answers to the four simple questions that allow healthy business people to stay wealthy

 
Answer to Question One:
NO! Your Wellington advertising and marketing is NOT working. That’s easy to tell because only half your business comes from Wellington. The other half comes from Palmerston where you do no advertising at all. Which means it is fair to assume that your sales (in both cities) come from some source other than your advertising and marketing? If their sales are not coming from their marketing the wealthy look for where they are coming from (referrals from existing customers?) and they shift their marketing efforts to concentrate on those people.
Answer to Question Two:
80% of the money you spend on marketing and advertising is being completely wasted. That’s because only 40% of your sales are coming from those people and half of them come as the result of referrals (from existing customers). If only 20% of your turnover is likely to be as the result of your advertising, then 80% of it is being wasted! The wealthy take the money that’s being wasted and spend it on people and activities that are generating sales.
Answer to Question Three:
Without any marketing, 2% of your business comes from criminal law. Which means that if you did start marketing general messages about your business then 2% of any increase would be likely to come from criminal law. If you used specific criminal law marketing messages you would obviously generate more. But the same amount spent on specific conveyancing marketing messages would result in many more times the result. The wealthy focus their marketing where the sales are easiest to get!
Answer to Question Four:
Easy. 70%! If 70% of your turnover comes from conveyancing and you don’t have to market to get it, then 70% of whatever increase you get from marketing will want to come from conveyancing. The wealthy look for where the market wants to spend money and then markets to that. They don’t waste money marketing to areas where the spend is small and, all things being equal, is likely to stay that way.
 
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