Smart Marketing: Sales = f(Reach,Response,Conversion)

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Now I am sure all of us have been approached by various marketing 'guru' offering a multitude of ways to boost your sales, make a million in two weeks, become a billionaire in two months. There is the 'Guerrilla' marketing method, the pyramid method, the relationship method, the direct selling method, the multi-level method, the blast method, the brand-centric method, the push sales,the pull sales, the customer relationship method.

And the study and books? I have learned them in school, in university and then when working. There were marketing books for dummies, morons and the insane. There were books on everything: branding, advertising, more advertising, budget marketing, some more branding; for experts, layman, and like I said earlier morons.

uh! uh! Don't forget that the Web 2.0 and the Social Media have opened a whole new can of marketing books and studies.

But wait. Hold on a second. Is it really that complicated?

Well, not really.

What I found was that after all these mumbo jumbo, sales must conform to the following formula:

Sales = f (Reach, Response, Conversion)

Sales is a function of reach, the response to the reach (also known as leads), and finally the conversion of those leads. All small business must know this by heart because if not, you could be wasting your marketing budget  and your energy away. I hate to use the acronym ROI (because I have overused it in my days as an investment banker, trying to get best valuations), but this is how you maximise your marketing ROI.

Reach is your visibility and contact with the customers. Most people call this advertising, promotion or marketing. You have to maximise your reach with your marketing/advertising activities.

Response is the positive feedback that you get from your advertising. It is the percentage of those whom you reached decided to take an interest in your product. This rate is very important as it will determine your leads. Some would also immediately buy your products - that is when they are converted.

Conversion from being an interested party to buying party (customer) can happen on the spot, when you are reaching to them for the first time. Some customers take longer, they need to be 'touched' again the second and third time before that make their purchase. This rate is also very important as it determines your sales rate.

Many small businesses make the mistake of focusing too much on the reach, and ignoring the response and conversion rates. In this case, the entrepreneurs will find themselves working very hard to market their product, but coming home with little results to show. It would be very frustrating.

But there are ways to maximise your sales, now that you have the formula. One way is to create an ultimate customer, then create a brand (on a budget). The only way to make big sales with little money is to be creative and resourceful.

Work Smart Everyone

Other suggested reading
1. Start-ups advice
2. Building a business model
3. Entrepreneurs in distress

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The Author is the principal of ElixirEducate - a training house for Smart Entrepreneur Program Series. If you would like what you read above or want to know more about our training, we would be grateful if you could 'like' us at our page here. If you would like to to find out or learn more about the the article above, you can email the author directly at yazdi@theelixirstore.com or be his facebook friend here.
 
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