Through out the year I get many calls from lawn care business owners that ask me for our help and more specifically they ask, how can I double my business this year…
Sadly, few like the answer I give… So lets start from the beginning…
Through out the year I get many calls from business owners that ask me for our help and more specifically they ask, how can I double my business this year…
Sadly, few like the answer I give…
So lets start from the beginning…
Now acquisition costs vary from marketing strategy to strategy… Referrals for example are going to have some of the cheapest acquisition costs, but for the sake of the discussion, we are going to average this number across all of the different types of marketing you should be doing.
So when you average everything together, and include your time, advertising costs and any sign up discount your probably going to be looking at a $50-$100+ to acquire a single new customer.
This is an average.
Now if that sounds like an extraordinarily large number to you, then there is probably a pretty good chance are you are not accurately, tracking your investment of time and money in your marketing.
I know many of you have done direct mail yourself and gotten and extremely low response rate, and if you have done the math on that, you have discovered some of your direct mail campaigns acquired customers for $250 or more. Because you sent out a $1000 mailer and got 4 clients.
So Once you know this number the most simple calculation you can do to determine what it is going to take to double your business is to multiple the average acquisition cost with the total number of clients you want.
So if you need 300 new clients, you might expect to spend $30,000.
So one gentleman, in particular who called, was very gung ho, yeah, I’m going to double my business this year I’m going to do finally do it this year…
but when I broke down the reality of what he is going to have to invest….
He didn’t like this answer. What He wanted was a magic wand that would magically make clients appear , for nearly no cost.
That magic wand doesn’t exist. You must invest time or money for every single client you want to aquire. That means, estimating time, phone staff time, advertising costs, sign up discounts all of this is part of your aquistion cost..
That means even that “word of mouth” advertising your doing, has a cost associated with it…
I completely understand this mindset. Its incredibly common, especially when you don’t track your marketing and you don’t actually know how much your spending to acquire customers. Many lawn care business owners, just don’t know… and that’s okay. So long as they change that…
But you need to realize If your entire marketing budget is $500/month, you shouldn’t expect to grow fast. That is an incredibly tiny marketing budget.
And if you have a business of any significant size, you certainly aren’t going to be able to double it.
Think about it, $500 bucks will barely pay for a nice smartphone these days. My phone bill is $500/month.
So If you aren’t investing in marketing your business each and every month. You should not have expectations for any significant growth…
Secondly, if you don’t want spend $100 to acquire a client worth $4000 or more over three years… that is just crazy… do the math… that is a 40 times return on your investment.
everybody starts somewhere but Its up to you to change that thinking,
So Here is what you need to do:
1. Take out a set salary for yourself out of the business every month. And don’t exceed this number. This is your salary and doing this will keep you from treating your business like a checking account. you can leave more in the business if you choose.
2. Track your marketing. Understand how much you have to invest in each marketing strategy in order to close a client. This is the metric that matters most.
3. Reinvest in your marketing
a. The more money you invest in the right marketing strategies. The faster you will grow.
b. Start by reinvesting more in the marketing strategies with the lowest CPA first.
c. Invest in additional marketing strategies to capture customers your couldn’t reach otherwise.
i. For example, lets say your entrire marketing budget is going to Google Adwords, PPC. Well there is a segment of the population that will never click on your ads, but they will click on your website, if your running a successful SEO program. Or they may respond to a door hanger or mailer.
ii. So you need to expand your marketing and do more than just one thing…
Now, when you get this. When it clicks in your brain and you fully understand this concept…
You will have a big advantages over your competitors who are trying to spend as little as possible.
That’s ridiculoust… the most successful entreprenuers know that being in a position (and willing) to spend more to acquire a client than your competitors gives you huge leverage over you competitors.
It gives you the ability to fight for the best customers and generate more revenue faster.
Marketing is an extremely lucrative investment. The wealthiest people in the world realize marketing and innovation are the two things that make you the most money.
This industry is littered with guys still on truck…. And they are still stuck on the truck because they never took running a business seriously, the never took marketing seriously and they were unwilling to invest in themselves…
So I encourage you to take it very seriously. It’s the difference between being on the truck for another 10 years or just cashing checks and never going into your office.
Decide which path you want to take…
Great advice !!
Thanks Cory! I hope you take action and implement! That is the only way we move ahead!
~Andrew
I can really appreciate this guy he gives u the reality of what is really going on in your business but he doesn’t leave u stuck and confused he gives u great advice that if u listen can help you tremendously
Thanks Lloyd! ~Andrew