How do you market a business, a product or a service successfully while keeping in line with a marketing budget?  The first thing is to work out your marketing budget.  I was fortunate to be taught early in my career about percentages.  Understanding of total revenue base and how a business can maintain a profit by working in percentages. 

I was with my friend this morning and he has a car wash business.  He will have an annual turnover of about $300,000 per year.  He has run this business for just on 3 months.  What should he spend on marketing? What marketing should he do? How does he measure the results? 

When you take into account a business and the three key costs which are generally labour, premises and marketing, usually labour will be approximately 45% of total turnover, premises 5%, and marketing should be no more than 4%.  The balance are generally sundry costs which add up to around 20%.  This gives the business a target of 25% gross to net profit.  If we quarantine marketing then he has a total spend available of $12k.  It doesn’t seem much but there again he is in the business of making people feel good about their car 

What we all know is who our customer is.  80% of his customers are known.  So immediately he has a target but if he can only spend on average 4% of his total turnover to attract a customer then where does he target it? 

The best form of marketing for his business is brand marketing through the customers that he currently is getting.  Emphasising loyalty and referral will be the best way for his business to continue to grow at a steady rate.  Remembering that the customer of his business will always want their car washed.  The question for him is “will they come back?” 

It is important to know the percentages within your business, they are standard and how you market your business or your product, linked with your service, is a key to new customers and customer retention.  In our business of real estate, generally the focus is on the product and rarely on the brand but with many businesses the focus is on the brand and then it drills through to the product.  My recent experience at looking at cars shows an emphasis on the brand which then provides the different products within that brand.  How much do you spend on marketing and is it at the 4% level?

Our newspapers every day are full of headlines about the economy, crime, the political scene and other world events and you read those articles and that is what makes up our news.

When you go to the airport and you are going through the process of boarding a plane, leaving aside the sometimes frustrating experience that surrounds the process, when you look around at airports, they are an incredible place in the fact that the real news within us could be seen at an airport.  Rarely any other place will you see the emotion of families about to be separated and how that is expressed.  Conversely in the arrivals hall the joy that people have in being reunited with friends and family.  It really is amazing that the real news of the day can be seen at an airport. 

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There is a lot of hype surrounding social media. 

I read a statement recently that social media is the new high ground for successful business leaders.  I would strongly debate that under the basis that social media falls into the non- contact mode.  I would agree with the commentators that say that having  a social media position is vitally important, but in saying that, I would strongly disagree with any business leader who believes that social media is the new high ground. 

There has always been two forms of high ground in business.  The first is recognition and the second is reputation.  There is an old saying that “charity begins at home”.  The high ground in business is with your own people.  I have on most occasions been able to keep the high ground in recognition.  I am not saying that this is unchartered territory but I would stand by two disciplines that I believe will serve any business leaders or person in sales better than social media presence will ever serve.

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The last decade has been a period of extreme confidence.  All the markets continued to rise and rise for the majority of the decade.  We were told to believe in ourselves, we learnt that investing was a necessary behaviour to grow wealth, we made business decisions based on the high point of our revenue, and the environment was one where more wealth was created than any previous decade.  Some of the numbers during the last 10 years were staggering – there were more new cars sold, there were more property transactions, there were more people in employment, the average earning capacity of an individual rose to record levels and more wealth was created in the last 10 years than in the previous 50 years.  So when you reach such highs, why did the sudden drop come so unexpectedly? 

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I recently spent time in New Delhi, India and I was fortunate to be hosted for a lunch at a traditional Indian restaurant. 

When you are in someone else’s country you are effectively in someone else’s culture.  We got to talking about languages and the traditions that surround the use of language.  Over the past 10 years English has become a preferred teaching language in India, to the stage where many parents who can afford it send their children to international schools to ensure their children have exposure to English. 

The interesting point about this is that when a generation is being taught a new language then the gap between the generations becomes wider.  But from talking with my hosts, there is an upside and that is the desire to understand culture has never been greater.  His children want to know and ask a lot of questions about Hindu traditions and they want to learn more about what their parents and grandparents have done in the past.  Is the past considered important enough to the future? 

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