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ArticlesFor Business Owners
[ February 26, 2020 by CJ Easter 0 Comments ]

The 12% Marketing Investment Formula

Last month, in this article, we talked about the different channels you should have in your marketing investment portfolio. This month, we’ll discuss how much you should be investing in that portfolio.

The majority of independent gyms are underinvesting in marketing.

And because of this, they are getting left behind as boutique franchises buy up market share with their corporate branding campaigns AND large local marketing budgets.

According to CMO Survey by Duke University, Deloitte Consulting, & the American Marketing Association, the average service business spends 12% of revenue on marketing.

Based on my experience in my own gyms and working with hundreds of other gyms at Lead Engine Marketing, investing 6-8% in marketing will replace your monthly churn and keep your head above water, while 10-12% is necessary for growth.

However, not every gym has the financial bandwidth to invest 12% of revenue in marketing, but every gym owner has control over how they invest their organization’s time.

Based on this concept, we will reframe how we think about the term ‘investment’ and look at it as both money investment and time investment.

Total Marketing Investment = Money Investment + Time Investment

So how do you invest 12% into marketing when you don’t have the resources to afford that?

Here’s an example…

1 – Let’s say you want to grow pretty aggressively, so you decide to invest 12% in marketing.

Total Marketing Investment = 12%

2 – Your business can afford to invest 5% of revenue in marketing.

Money Investment = 5%

3 – This leaves a 7% balance that you must account for in time.

(Total Marketing Investment = 12%) – (Money Investment = 5%) = (Time Investment = 7%)

4 – Let’s say your staff consists of you + 1 full-time employee + 1 half-time employee, your total available working hours per week is 100 hours.

Total Available Working Hours = (You = 40 hours) + (FT Employee = 40 hours) + (HT Employee = 20 hours) = 100 hours per week

5 – So according to our formula, 7% of time should be invested in marketing, so 7 hours per week should be scheduled for marketing activities.

Marketing Time Investment = 7% x 100 hours per week = 7 hours per week

These hours can be assigned based on your organizational chart, but they should be built into your organization’s weekly calendar on a recurring basis.

(And remember, marketing activities are activities to develop new leads, not selling existing prospects)

 Growth requires investment. Investing money might buy you some speed, but even if you can’t afford to ‘go fast’, you can still ‘go forward’ by investing your time accordingly. And now you have the 12% Marketing Investment Formula to help you make the proper allocations.

 

If you feel like you’re underinvesting in marketing (while your competition is buying up your market share) and you’re ready to work with a team of Facebook ad experts to manage your digital marketing investment portfolio…
Apply to Lead Engine Marketing Now

 

 

 

ArticlesFor Business Owners
[ January 22, 2020 by CJ Easter 0 Comments ]

3 Lead Channels You Should Be Invested in This Year

The opportunity in Facebook ads has been both a gift and a curse for gym owners. 

Never before has the attention of your ideal clients been so quickly accessible. However, because of this ease of accessibility, many gyms have become overly dependent on a single lead channel. So if Facebook changes a rule or impressions become more expensive (as it typically does over the holidays), these gyms are left scrambling for leads.

To avoid becoming one of these single channel gyms, you should look at your marketing like an investment portfolio. You can reduce your risk to changes in the market by diversifying your channels and consistently investing in them.

Here are the 3 categories of lead channels you should be invested in to diversify your marketing portfolio:

Low Volatility, Low Volume

In investment terms, low volatility, low volume lead channels are the savings account of your marketing portfolio. Referrals are the best example of this type of lead channel.

These leads are low volatility because you will likely close 75%+ from these channels and low volume because your leads will be limited by the number of clients you have and the number of people they are willing to refer to you.

If you are in a stage in your business where you want to maintain your current number of clients, investing in low volatility, low volume leads is a sound strategy. 

Medium Volatility, Medium Volume

Medium volatility, medium volume lead channels are the bonds of your marketing portfolio. Inbound traffic sources, such as search traffic to your website/online content or walk-in traffic if you are in a busy shopping center, are examples of this type of lead channel.

These leads are medium volatility because you will likely close around 40-50% from these channels and medium volume because your leads will be limited by the number of people in your area actively looking for you.

If you are in a stage in your business where you want single digit % annual growth of number of clients, investing in medium volatility, medium volume leads is a sound strategy.

High Volatility, High Volume

High volatility, high volume lead channels are the stocks of your marketing portfolio. Direct response digital ads, such as Facebook ads, are examples of this type of lead channel. 

These leads are high volatility because you will likely close around 10-20% from these channels and high volume because, although you are limited by your market size, you can control how often your ads are placed in front of your audience.

If you are in a stage in your business where you want double digit % annual growth of number of clients, investing more in high volatility, high volume leads gives you the opportunity to grow fastest.

What’s the Ideal Long-Term Marketing Portfolio?

The ideal long-term marketing portfolio is consistently investing in all 3 types of lead channels and has the ability to increase or decrease your investment in certain channels depending on your quarterly/annual growth goals.

 

If you’re a gym owner who wants to grow your revenue from low 6-figures to mid 6 (even 7) figures by investing in Facebook ads AND you want a team of professionals working to maximize the return on your ad investment…

Apply to Lead Engine Marketing Now

 

ArticlesFor Business OwnersStage 2
[ March 26, 2019 by CJ Easter 0 Comments ]

Are 6-week Transformation Challenges Dead?

Analysis of a $60,000 transformation challenge

ArticlesFor Business OwnersStage 2
[ March 5, 2019 by CJ Easter 0 Comments ]

How Much Is a Lead Worth?

Do you know how much a lead is worth to your business? Here’s how to find out…

ArticlesFor Business OwnersStage 1
[ February 5, 2019 by CJ Easter 1 Comment ]

5 Things To Do When Your Leads Aren’t Responding

Frustrated with leads ‘ghosting’ you? Here are 5 ways to ease your frustration.

ArticlesFor Business OwnersFor Fitness ProsStage 2
[ December 26, 2018 by CJ Easter 0 Comments ]

4 Reasons High Performers ‘ABM’

High performing fitness business owners ‘always be marketing’, even when it’s hard, because it’s a necessary behavior for their success.