Have you ever stopped to think about the actual lifetime value of a customer? It doesn’t just necessarily mean that one customer, but everyone that customer has also sent your way whether that’s through face to face referrals, testimonials or simply checking in on socials.
When you are calculating the cost of acquisition of a customer these are all factors that you need to consider and the reason why the longer you’ve been in business the easier it gets.
Say you were to do a promotion. You give a first-time customer a 20% discount. Just to make it easy, let’s say the total is $100 and they’ve saved $20. You’ve made $80, which should cover your expenses and advertising costs to aquire that customer. Hopefully there’s a little profit as well.
Depending on your business that customer might come back a few more times. They tell their friends and some of them use your services. They leave a review which has sparked someone else to use you. A couple of those people have ‘checked in’ to your business on socials and have brought your business in front of more people that didn’t know you existed.
Now how many people are aware of and have used your business from that 20% discount?
Pretty powerful huh?
Check out this video on how I use promotions in my business….
Do you create beautiful work but struggle with the business aspects of running your business? I used to be that person too. The truth is to be successful as a creative you need to be just as good if not better at the business side of your creative gig. You need to be able to sell your work by working on people’s psychology, you need to be a marketing guru and you need to know your numbers so you can actually pay yourself and not just be a struggling artist for the rest of your life!
Here are my top tips for creating a successful creative biz!
Know your numbers! At the end of the day if you want to make a full time career from your creative skills, you need to know your margins and how much you want to earn for the year. To work this out you need to work backwards. How much does your business cost you to run each year including all of your marketing to get your clients for the year. Work out how much you want to take home. Divide this by how many clients you want to work with (make sure it’s reasonable so you don’t burn out!) Add in your holiday time. Now this can all be a bit daunting once you add it all up you’ll be surprised to see how much you’re actually paying yourself an hour. Do yourself a favour and charge accordingly. If you’re still building your portfolio make sure you have a plan moving forward so you’re not shooting yourself in the foot! Develop your skills then raise your prices every 6 months to a year until you’re where you want to be.
Create a tribe of raving fans! Your tribe will probably start off as friends and family as you practice your skills, but as you build your portfolio you’ll have more clients and friends in the industry referring you. Make sure you nurture these relationships. These are your free leads and where you’re best clients will come from.
Become the public face of your business. As creatives we tend to hide behind our work. Your work can be amazing but if people don’t know who you are no-one will hire you. Get out there and network. Collaborate with other businesses. Build those relationships in person and create another referral stream. Remember people buy from people they know, like and trust.
Map out your client workflow. You need to have a clear process of how you will work with each client so you can be working on multiple jobs and know exactly where you’re up to with each client. When you’re first getting started I suggest you have a spreadsheet that tells you where you are up to with each client and put important dates like deadlines into your calendar. You can use google sheets online which will give you access no matter where you and as you grow you can give access to others if you want to start outsourcing some of these tasks to a VA, assistant or producer. Once you get established get yourself a CRM (customer relationship manager). This is an invaluable way to automate emails, invoices, contracts and workflow stages and will ensure you can stay in touch with your clients no matter where you are. I use studio ninja – studioninja.co (Use this promo code: LE100976Y and get $5 off your monthly subscription!)
The secret to building your business is in automation!
Outsource. As you start to grow you will run out of hours in the day to do it all yourself. Outsource the things you hate or are the most time consuming, like your accounting, admin and editing work. The sooner you can outsource, the faster your business will grow so you can focus on the important aspects of growing your business!
Commit yourself to learning. As a small business owner we are always learning and in today’s fast paced environment things are always changing. We have to be flexible and change with the times if we don’t want to get left behind (think Kodak and Dick Smith!) Make time in your schedule to listen or watch learning tools in your industry or about business in general. If you can afford it invest in a mentor. Having a mentor is an invaluable tool as they can give you expert advice and become your accountability partner ensuring you are growing your business. It’s great to get an outsiders viewpoint sometimes.
If you follow these 6 steps it will ensure your business is set up to grow without you burning out and loosing the passion for doing what you love!