What is business coaching? Nothing more than helping you set and achieve personal goals for your business. For example, your business coach would encourage you to ask yourself questions like the following. The answers will require some research.

  • How well can this media target my market with my message?
  • Which media will give me the highest response rate?
  • Which media can extend my message to the most people per marketing pound?
  • How easy will this media allow my market to respond to a request for free reports?
  • What is the cost per thousand (CPM)?

The question about CPM is an important one because it determines how much it’s costing you to deliver your marketing message to a specific number of people. Unless the message “pays for itself” by delivering pre-qualified prospects that are being converted to buyers, it’s not worth the money you’re spending on it.

Profitability Equation

There is a pair of simple equations that you can use to figure out your CPM:

Cost (divided by) number of listeners = cost per listener 

Cost per listener times 1,000 = CPM

Still confused?  To illustrate this point, I’ll use a radio buy as my example.  Let’s say your airtime for running a radio spot commands a fee of £5000, and the radio station’s data shows 50,000 people matching the age of your target market audience are listening during the time period that you are considering.

To determine whether this is a good buy for you, the first step is to compute CPM as follows:

£5000 for 50,000 targeted listeners = 10-pence per pair of ears = a CPM of £100

That’s just £100 to reach 1,000 highly targeted prospects.  It’s much less than you’d spend for any kind of printed marketing outreach where the expense would include printing and postage.

You can’t give your thumbs up or thumbs down to a media buy simply because it offers a low CPM. It needs to return a high rate of return – enough qualified prospects that become buyers – that the profits you generate from the ad offset its expense… no matter how minimal.

The CPM calculation is the best mathematical equation you can learn. With it, you can do the same profitability calculation for any media. This will help you answer the question, “Which media can extend my message to the most people per marketing pound?”

However, it still doesn’t answer the question of how effective it will be to meet your objectives.

For example, if your objective is to distribute free reports as a lead-generating tool, then newspapers are a good choice because you can show a picture of the free report and the phone number is right there. This is much easier for a prospect than trying to memorise your number from a radio ad while driving to work.

I hope the question of what is business coaching is now not such a mystery. Feel free to contact me with any questions about this or any other topics related to your business goals.

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