I need some help understanding what’s going on with one of my clients. I’ve been trying to get them to raise their ad budget ever since I learned that they’ve been getting a great return on it. They recently hired a business manager consultant which has been very diligently looking at our conversion data for our ad campaign that we are running for them, and tracks which conversions are turning into actual customers (or patients, in their business).
This consultant told me that they made over $50,000 in new business with these campaigns and they only spent $3,600 an digital ads. They were incredibly happy about this (of course). That’s over 10x return on advertising spend but here’s the part I don’t understand… Instead of increasing their monthly spend on advertising they’re interested in going to different routes like more email marketing and direct mail marketing which we still do for them, but I just don’t understand. We live in a huge market and there’s so much untapped potential. Why wouldn’t they just up the spend that’s already giving him such a great return?
Btw, the consultant absolutely thinks they should be increasing their ad spend, but the end client is hung up on it. They are also small business. If you got these kinds of results, what would be a reason to keep you from doing more of what’s already working?
Maybe they don’t want to grow that fast? Sometimes it is better to slow the roll if you haven’t figured out exactly what you need to get done in order to scale without major pain points.
1000% scale slowly so you don’t ruin your reputation and maintain high-quality service while working on your processes.
Perhaps the consulting team should recommend sitting down and figuring out how to help them scale the business - systems, processes, hiring.
This is exactly what we did. We literally couldn’t take on any more business and didn’t want to get shitty reviews online.
Rapid growth can be extremely expensive.
It requires upgrades in infrastructure and workforce.
Building a business can also be costly for the owner’s mental health. You can drive them 2x the revenue? What about their fear? What about their spouse’s expectations and being present for their toddler? How are they gonna hire more production staff or scratch up another $xx,000 to buy another mold? How to they pay in advance for the inventory when the growth is sudden? And…owning a business is scary! Caution and fear are similar and sometimes indiscernible to the outsider and…also to the owner!
Last, perhaps they make a higher % on other sales channels, perhaps direct? You may be filling up their Friday but maybe their near-and-potatoes direct sales are their Monday-Thursday.
And maybe they’re comfortable or depressed or scared or overwhelmed about everything everywhere all at once!
Ask them the question in a kind way—as a partner and not just a person wanting to double your commission by simply doubling their spend and suddenly doubling their workload! Making stuff is hard work.
It is always in the best interest of anyone to look at your life balance factors and decide how busy you want to be as a person.
My dad’s business had a Covid boom due to the industry, blew up bigger and faster than he ever could’ve anticipated and then I joined the business, spent 18 months trying to establish new processes and procedures to match the growth, which has worked for the most part. Terribly frustrating though not seeing him prepared for this and being able to make the most of it. The income has gone from around 3 million a year to about 7 million a year, with revenue percentages sitting about the same. If he was prepared for this huge increase, he could’ve made it much more profitable for sure
Typical fear of success. Or they’re content with less and just don’t strive to be at the top.