Monday, February 07, 2011

$50,000

Every Tuesday at 7am, I post another chapter to the Not-So-Secret Writings of ScLoHo. Click here to go there tomorrow.

In the meantime, here's the latest from last week:


In the "good old days" of advertising and marketing, a company would often develop a plan for the year and stick with it. That plan would include a budget for this, for that, and have expectations of growth base on doing better than last year, etc.

I still have companies that plan for things annually, which is smarter than not planning at all.

But if you don't allow for some wiggle room, you could be missing out.

Missing out on an opportunity that you were not aware of when you had your planning meeting 6 months ago.

And what happens when you say, "No, it's not in the budget"?

Someone else says, "Yes, I'll do it."

How does that add up when it is your competitor?

Here's the math:

Let's assign a value of $1000/per year to a new customer. Your numbers could be much, much higher. Let's also assume that the opportunity could have brought you 50 new customers.

You say no. That means you are saying no to inviting potential customers to spend money with you. Using the numbers above, you said no to $1000, 50 times or $50,000.

Well, you still have your original plan, so everything should be fine and dandy.

Try and ignore the fact you turned down an additional $50,000.

But that $50,000 has also been taken out of the marketplace that perhaps you were counting on in your original marketing plan.

Now instead of losing out on increasing by $50,000; you've lost $50,000 in business that you were counting on coming your way.

How rigid do you want to be?

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1 comment:

randy said...

I like your thought process. The team at TKO often needs to slow me down. As you know that can be good and bad. I'm certain you could write a post about acting too quickly, not having a plan, or not completing research. However, there is a time and place to get off your… plan and take advantage of an opportunity.