December 08 Happy Christmas!

Sources of business

How do you link marketing activity to financial targets?

How can you apply the sources of business principle to your business?

Are there any other sources of business?

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As thoughts turn to Christmas and planning for 2009, it is worth thinking about where your turnover is going to come from next year. An effective way of doing this is to think in terms of �sources of business�.

Very often, business plans are written with a very clear financial target for turnover or profit, but no indication of where the business is going to come from.

1. Break down your targets into the 4 sources business

2. Monitor achievements in all 4 areas

3. Align your marketing activity to the 4 sources
of business

4. Introduce the phrase �sources of business� into the lexicon of the office and your sales team

5. Go further � apply the sources of business to individual product lines

There are 4 main sources of business
Source 1 � repeat business from existing customers
This might be �endowment� income from contracts you already have in place or repeat business that you believe you can count on.

Source 2 � new business from existing customers

This is additional income you can generate from existing customers by cross selling other products and services

Source 3 � new business from referrals

This might be referrals from existing customers or introductions you can gain from networking activity

Source 4 � new business from new customers

In many cases, this is the hardest and most unpredictable source of revenue. Nevertheless, new customers are the life blood of any business and cannot be neglected.

By breaking your financial targets down in this way, it is much easier to identify where your marketing needs to be focused and the nature of the activities that you need to undertake. For example, if a lot of your business is going to come from sources 1 & 2, you need an emphasis on retention type activities such as hospitality and customer care initiatives. On the other hand, a realisation that you won�t be able to generate the revenues you need from existing customers means you need new ones and might suggest direct marketing or advertising.

Try breaking down your financial targets into the 4 sources of business and monitor them all. If new business comes in from one source sufficient to cover a shortfall in another, keep going on the shortfall and blast your overall targets!

Have a wonderful Christmas


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