Textbooks are overrated. I spent 21 years of my life in school (6 of those studying business), read hundreds of textbooks cover to cover, and remember very little. Textbook information definitely does not equate to real-world relevance. I remember that one of my marketing textbooks while I was finishing up my MBA stated that 13% of gross revenues should be reinvested into your marketing efforts. I say that’s a very one-dimensional (and dangerous) way of determining your marketing budget.
What do you do if your club is at break-even or below break-even? Do you spend 13% and give up more of your own salary or borrow from other departments or be late on rent? I would hope not. And what if you’re already profitable? By following a pre-determined percentage, you very well could be spending unnecessary profits you could put in your own pocket or redistribute to other projects at your club.
And the timeless quandary of whether the chicken or the egg came first. Do you spend marketing dollars you don’t really have, expecting to receive them back from sales…or do you try to make more sales so that you have marketing dollars to spend? All of this makes determining a marketing budget seemingly tricky. I have a solution for you.
Instead of worrying about percentage of revenue, the best way for you to determine your marketing budget is to determine the answer to this question:
How much do you need to spend on marketing in order to reach your revenue/profit goals?
To do that, you need to forget everything you’ve learned from textbooks, and you need to work backwards to determine the optimal amount you need to spend on your marketing efforts. To start the process you need to start with two numbers. You need to know how many leads you need to come through your door and you need to know how much it costs to generate a lead.
Let’s assume your average membership grosses you on average $500. Let’s also assume that you’d like to generate $500,000 in revenue this year. That would mean you need 1,000 sales to reach that goal. If you are closing 70% of the leads that come through your door, that means you need 1,429 leads to come to your business this year (1,000/.70=1,429)
By tracking the total number of leads you generate from your marketing efforts, you will know how much it costs to generate a lead. For example if you run a newspaper ad for $750 and it generates 25 leads, your cost per lead is $30. (forget about actual sales when determining this number, since you already calculated it through your closing percentage above) If you run a direct mail campaign, spend $4,000 and generate 50 leads, your cost per lead on that campaign is $70. If you run a referral campaign, spend $500 and generate 100 leads, your cost per lead = $5. You’ll then tally all marketing dollars spent and divide by the total number of leads and you’ll have your cost per lead. In these two examples $5,250 / 175 leads = $30 lead acquisition cost.
You’ll then multiply the lead acquisition cost by the total number of leads you need to reach your annual revenue goal of $500,000 to determine how much you need to spend on marketing this year ($30 x 1,429 = $42,870). This means that your optimal marketing budget is $3,572 per month or 8.5% of revenues.
Remember however, that we’re just considering membership revenues in this calculation. If you’ve done a good job of implementing a variety of profit centers and upsells, you know that the average lifetime value of a client could be much higher than $500. Conversely, if you’re doing a poor job of retaining members, the loss rate could bring the lifetime value of a client lower. Other things to consider are profit margins, commissions paid to sales people, closing percentage, But the above calculation should give you a good starting point.
The power of working backwards from a lead/sales standpoint rather than simply from a percentage of revenue is that you are focusing on the factors that are responsible for sales and revenue. This is a much better approach to determining your marketing budget. Your investment in marketing will always end up as a percentage of revenue, but it shouldn’t start there. Always begin with the end in mind and you will be more likely to reach your goals.
44,334 replies to "A Better Way to Determine Your Fitness Marketing Budget"
Hello! buy generic ed drugs good site.
Its such as you read my thoughts! You seem to
know a lot about this, like you wrote the ebook in it or something.
I think that you just can do with some p.c. to drive the
message house a bit, but instead of that, that is excellent blog.
An excellent read. I will certainly be back.
Thahk уou for sharing your thօughts. І really appreciate your efforts ɑnd I am waiting foor ｙоur next wгite uρs thank
you once again.
lisinopril 10mg tablets
Hey guys,
Do you know any good tool to increase or calculate lottery chance to win?
I’m trying to understand is this site is good enough
Any thoughts?
http://studiogoweb.com/ – Azithromycin Tablets 250 Mg
Have you ever thought about adding a little bit more than just your articles?
I mean, what you say is fundamental and all. But just imagine if
you added some great visuals or video clips to give your posts more, “pop”!
Your content is excellent but with images and videos, this website could certainly
be one of the most beneficial in its field. Awesome blog!
We’re a gaggle of volunteers and opening a new scheme in our community.
Your web site provided us with valuable info to work on. You have performed
a formidable job and our entire neighborhood might be thankful to you.
prednisone
Hey guys,
Need some advice about prostate complex.
I have some troubles with prostate health and i want to buy good prostate complex as simple supplement
One of the sites i found is prostatecomplexpro.com
Any advice?
Your way of describing all in this article is truly pleasant, every one can effortlessly know it, Thanks a lot.
Hello! cialis online canadian pharmacy beneficial internet site.
Index Search Villas and lofts for rent, search
by region, find during first minutes a villa to book by city, a variety of rooms lofts and
villas. Be in awe of the photos and knowledge that they have to
offer you. The website is a center for all of you the
ads from the field, bachelorette party? Spend playtime
with a buddy who leaves Israel? Regardless of the explanation you should
rent a villa for a forthcoming event or maybe friends recreation appropriate for any age.
The site is also the midst of rooms because of the hour, which is definitely another subject,
for lovers who are seeking a luxurious room equipped for discreet entertainment
by using a spouse or lover. Regardless of what you are interested in, the 0LOFT website
creates a try to find you to identify rentals for loft villas and rooms throughout Israel, North South
and Gush Dan.
Hi! buy ed drugs cheap very good site.
i love ur article. please come on my website also
I must say got into this article. I found it to be interesting and loaded with unique points of view.
http://buymedrol.us.com/ – medrol online
I am regular reader, how are you everybody? This paragraph posted at this web site is actually fastidious.
This Wallet Pays Up-To 15 Monthly Interest! http://bit.ly/2L638KX
I for all time emailed this website post page to all my associates, for the reason that
if like to read it then my contacts will too.
Have you ever considered about adding a little bit more than just your
articles? I mean, what you say is important and everything.
Nevertheless think of if you added some great pictures or videos to give your posts more, “pop”!
Your content is excellent but with images and video
clips, this site could certainly be one of the very best in its field.
Awesome blog!
Thanks very nice blog!
We’re having coffee at Nylon Coffee Roasters on Everton Park in Singapore.
I’m having black coffee, he’s which has a cappuccino.
He or she is handsome. Brown hair slicked back, glasses that suit his face, hazel eyes and the most wonderful lips
I’ve seen. He or she is nice, with incredible arms plus a chest that is different within this sweater.
We’re standing in-front of each other referring
to us, what we would like into the future, what we’re
in search of on another person. He starts saying
that she has been rejected plenty of times.
‘Why Andrew? You’re so handsome. I’d never reject you ‘, I have faith that He smiles at me,
biting his lip.
‘Oh, I really don’t know. Everything happens for good reason right.
But analyze, utilize reject me, would you Ana?’ He
said.
‘No, how could I?’ , I replied
“So, you wouldn’t mind if I kissed you at this time?’ he said as I purchase closer to him and kiss him.
‘The very next time don’t ask, just do it.’ I reply.
‘I favor how you will think.’ , he said.
For the time being, I start scrubbing my high heel in her leg, massaging it slowly. ‘So what can that suits you in ladies? And, Andrew, don’t spare me the details.’ I ask.
‘I enjoy determined women. Someone you will never know the things they want. Someone that won’t say yes even though I said yes. Someone who’s not afraid when you try new stuff,’ he says. ‘I’m never afraid when attemping new stuff, especially with regards to making a new challenge in the sack ‘, I intimate ‘And I really like women that are direct, who cut from the chase, like you just did. To generally be
honest, this is a huge turn on.
Howdy! buy tadalafil pills good site.
Greetings! Very helpful advice in this particular post! It’s the little changes that make the largest changes. Thanks a lot for sharing!
zithromax
Heya exceptional website! Does running a blog like this require a lot of work?
I have absolutely no knowledge of computer programming but I was hoping to start my own blog in the
near future. Anyway, if you have any ideas or tips for new blog
owners please share. I understand this is off topic however I
simply had to ask. Many thanks!
Every business needs to have a contact page.
Websites ranging bigger and sophistication originating from a local restaurant to some Fortune 500 company, have
contact pages. Inside my current startup I’ve seen numerous requests… on the pizza delivery guy letting
us know he was at the front end door to potential investors looking to talk with these
management team.
When you’re setting increase your contact page (and getting the traffic volume of your local restaurant) you might not want
to think about how to control your contact requests when site traffic
increases. And you should.
Consider creating automation that alerts support, sales or any other stakeholders with your company when an e-mail request
comes through. You can create a dropdown field in an application form for kinds
of contact requests. You possibly can set up logic in many marketing automation platforms that sends
email alerts to the appropriate resource in your startup dependant on the type of request the viewer selects.
I used to be buried with contact requests even as
launched beta. To be a cloud-based product I
saw many product support requests. Therefore we mapped form submissions on our
contact page to build support tickets in Zendesk.
You should also put in place redundancies so contact requests
(important ones!) don’t get lost in an individual recipient’s inbox.
You’ll be able to alert multiple recipients, create reminder emails, or trigger automatic replies to
make contact with requests with information that might solve their problem.
This is perhaps all easy to put together
with all-in-one marketing platforms like HubSpot.
I loved as much as you will receive carried out right here.
The sketch is attractive, your authored subject matter stylish.
nonetheless, you command get bought an edginess over that you wish be delivering the following.
unwell unquestionably come more formerly again since exactly
the same nearly very often inside case you shield this hike.
It’s remarkable in favor of me to have a web page, which is helpful in support of
my experience. thanks admin
http://baclofen.wtf/ – baclofen buy
Hi! online pharmacy without prescription great internet site.