Archive for August, 2009

Consumerism Reversal; Keys to A Profitable Company and Stronger Economy

bigbuzz August 28th, 2009

Survey: Women More Pessimistic Than Men on the Economy

Does that surprise anyone?

According to the survey results, 55% of women expect to spend less in the next 60 days, vs. 37% of men. And 41% of women expect to spend less on household essentials in that time period, up from 34% in April.

The recent survey by Performics I believe states something we all recognize. As marketers we often want to spend money on surveys to justify our positions to clients or make our point more prominent when all we have to do is look at out own household and that of our friends. It’s the same way many of us go about marketing our clients products, telling the public that they need more-bigger-better when in actuality we, as consumers, as a nation, need less.

That will surely piss a few people off, perhaps some of my clients, but it’s true. The consumer economy we have experienced has brought us to a point of drastically needed change. We won’t become the industrial giant that built the country but the consumer economy has run it’s course and the times they are a changing. Marketers and clients alike must realize this and adapt now or die.

What are we looking at here? As I see it we have begun a consumerism reversal. People are less secure in their jobs and are cutting back. They drive less, are more interested in fuel efficient vehicles, are spending more economically in their food choices, clothing travel and accessories.  Businesses who realize this and start providing goods and services that help people save will prosper. Those who continue to offer Keep Up With The Jones products will find themselves wondering what happened (the exception is ultra lavish targeted to the ultra wealthy. We’ll address that another day).

The marketers who speak to consumers in a truthful manor presenting a valuable product, will find themselves inundated with client request.

The fog is lifting  and consumers are now recognizing the difference between a want and need. And even though wants will exist they have changed.

Consumer confidence will change. It is changing but it’s leading us down a new path…an old path, one we’ve seen recycled over and over in history. Be aware of that direction and lead the way. This will not only produce a profitable company but a stronger economy.

Thanks for coming back to thebuzzforge. Feel free to leave a comment or shoot us a note.
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Consumerism Reversal; Keys to A Profitable Company and Stronger Economy

What’s a Customer Worth?

bigbuzz August 10th, 2009

About 1997 I began asking my radio clients “What’s a customer worth?”

It’s one of those questions every business owner and manager should know the answer to and a question every advertising and marketing professional should ask.

Few had and answer other than “What do you mean…I’m not sure.” or “ $58.76, pointing to the last cash register receipt.

Wrongo! Think long term. Think a life time of doing business with that customer. If your typical customer spends $58.76 with you each month he’s worth $681.12 per year. If you keep that customer for 10 years that’s $6811.20 if he spends the same every month and you never up sell him.

Here’s your assignment:

What is your average monthly ticket per month? (months total sales / # of sales)

Ex: $63,836 / 1542 = $41.40

What is the average life of a customer? Do you have customers return often over a long period of time or do they come and go like the wind? For our example let’s use 3 years and they visit once each month.

Ex: 36 months x $41.40 = $1490

Each customer is worth $1490 to you.

Ah but what if that person tells just one other person about you. That person’s value just increased. And what if that customer stayed 51 months or spent an extra $2 each month?

Or what if you upset that customer and they leave after 23 months or tell others not to shop with you?

You can see the variables that can effect the value of a single customer and the prosperity of your business.

For now start simple and do the math. What is a customer worth to your business?

We’ll delve into this deeper in the near future.

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What’s a Customer Worth?

It Doesn’t Matter

jeff August 9th, 2009

As the DOS of a major radio group my job was to maximize station revenues. My belief was that if we focused on maximizing client revenues our station revenues would be fine. One of the toughest ways to help clients increase business was to tell them they did not need or necessarily want the top rated, and most expensive, station. And getting this across to our sales people was just as difficult.

The truth is, it doesn’t matter what station or what media you advertise in. OK, that’s a blanket statement and is not 100% true but for most of the local businesses in the world, and most of the national advertisers, it doesn’t matter.

Put your money in print and if you do it well you will prosper. Put all of your budget in TV, Cable, Radio, Interactive….do them well and you will prosper. The problem comes when your advertising is not done well. And it usually is not.

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It Doesn’t Matter