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Feb 6, 2024

In the realm of marketing, setting the right expectations isn't just beneficial; it's essential. Understanding and realistically anticipating your returns is akin to navigating a ship with a reliable compass—you're much less likely to find yourself adrift, waiting for a windfall that will never arrive. This article delves into the critical importance of aligning expectations with actual marketing performance, illustrated through a compelling narrative.

The Journey Begins: A Tale of Investment and Aspiration

Imagine a scenario where a business is spending $3,500 a month on marketing, which leads to generating an impressive monthly new business range of $45,000 to $65,000. Encouraged by this success, the business sets a bold objective: to double the return on investment (ROI) without increasing the marketing budget. A challenging goal, no doubt, but not unattainable with the right strategy and understanding of the marketing dynamics at play.

Step 1: Know Your Numbers

The foundation of any successful marketing strategy lies in understanding your numbers, which requires at least a year of consistent marketing effort to accurately gauge. Throughout this period, a business will experience fluctuations—some months will yield high returns, while others may dip. The critical questions to ask are: Are you profitable during your peak months? What about the leaner periods? Calculating the average return over the entire year offers a clearer picture of the overall profitability and sets the stage for informed decision-making.

Step 2: Optimize Your Spend

The age-old adage by Dan Kennedy, "the person that can spend the most money for a customer wins," rings especially true in the competitive landscape of marketing. However, there's a fine line between increasing spend and optimizing it. Our journey from investing $2,000 a month to an eye-watering $40,000, before finding our optimal expenditure at $25,000, serves as a testament to the importance of finding your marketing "sweet spot." It's not always about spending more, but rather spending wisely.

Step 3: Maximize Your Profits

Once you've dialed in on your optimal spend, the next step is to look for avenues to maximize profits. This could involve strategies to close more sales, streamline your sales pipeline, automate processes for efficiency, and ensure rigorous follow-up practices. Every incremental improvement in these areas can significantly impact your bottom line, turning a good marketing strategy into a great one.

Homework: Setting the Stage for Success

This week, take a moment to evaluate all your marketing strategies. Are they meeting your expectations? If not, it's time to apply the three steps discussed. Understanding your numbers provides the foundation, optimizing your spend ensures you're investing in growth efficiently, and maximizing your profits turns potential into performance.

In conclusion, setting realistic expectations in marketing is not about tempering ambition but about grounding your strategies in data-driven realities. By knowing your numbers, optimizing your spend, and maximizing your profits, you can set your ship on a course not just for hopeful horizons but for tangible success.