The key to growing your business is buying new clients… what? How do you do that? Isn’t Marketing just buying clients? If your marketing is poor… you’ll pay more per client. If you have good marketing… you’ll pay less per client.
So, how much are you paying per client? AND… how much do you make, on average, per client? If you know these two numbers, you are likely to be a very successful advisor. Why? Because knowing these numbers does a few things:
- It makes sure you are only spending money on profitable marketing
- It makes sure you KEEP doing successful marketing. I can’t tell you how many times in the last 20 years I’ve had an advisor upset about spending $5,000 on marketing… and then when we crunch the numbers and find out they are making $25k… or more… every time they spend the 5k. How many business owners would like to turn $5,000 into more than $25,000 every month?
- It tells you how much a new client is worth. This is one thing that will drive an advisor to get better at their sales skills. Getting just one more client every time you do a marketing campaign is worth what? When was the last time you worked on your skills to make sure they are getting better every single meeting? All of my successful advisors record their client meetings and we analyze them together to constantly improve their skills. Those advisors make over $1 million/yr.
So, do the math…
Cost of Marketing ÷ # of new clients = Cost per new client
Income from new clients ÷ # of new clients = Ave Income per client
Income per client ÷ Cost per new client = ROI
Any ROI that is greater than 1.0 is successful. Hey, that means you made money!
Most non-financial business would kill for a 2-to-1 ROI. And successful advisors should be looking at the 5-to-1… all the way up to 20-to-1 ROI. Where is yours?