The strategy of subtracting advertising cost from product revenue aims to accurately calculate net revenue by factoring in advertising expenses. A key aspect is implementing a tracking system. For example, using robust accounting software can help track revenues and expenses, creating separate accounts for various advertising channels. This ensures a detailed view of how advertising impacts financial outcomes. Regular audits and training staff on software usage further guarantee the system's accuracy.
Another approach involves negotiating advertising costs. By researching competitive rates and discussing cost optimization with advertising partners, businesses can secure better deals. For instance, performance-based agreements or bundled deals can lead to considerable savings.
Finally, optimizing product revenue is essential. Conducting market analyses and employing CRM systems help in understanding customer behavior. Upselling strategies and targeted promotions can increase sales, as can collaboration with sales teams to align offerings with customer needs. Such efforts ensure that revenue targets are consistently met and adjusted for maximum profitability.
The strategies
⛳️ Strategy 1: Implement a tracking system
- Set up a robust accounting software to track all revenues and expenses
- Create separate accounts for different advertising channels
- Integrate payment gateways with your accounting system for automatic entry
- Develop a monthly reconciliation process for advertising expenses
- Assign a team or individual to regularly monitor and update expenses
- Implement automatic reminders for payment of advertising invoices
- Use data analytics tools to track and report advertising cost-effectiveness
- Train staff on using the accounting software effectively
- Regularly audit the tracking system to ensure accuracy
- Create monthly reports that show advertising costs subtracted from product revenue
⛳️ Strategy 2: Negotiate advertising costs
- Identify key advertising partners and account managers
- Research competitive advertising rates and industry benchmarks
- Prepare and analyse your company's advertising performance data
- Arrange meetings with advertising partners to discuss cost optimization
- Propose cost-sharing or discount arrangements
- Explore bundled deals for multiple advertising channels
- Draft and negotiate advertising contracts with favourable terms
- Evaluate performance-based advertising agreements
- Set clear KPIs for advertising success
- Regularly review and audit advertising agreements for cost-saving opportunities
⛳️ Strategy 3: Optimise product revenue
- Conduct a market analysis to determine optimal pricing strategies
- Set up a CRM system to track customer interactions and preferences
- Implement upselling and cross-selling strategies on your sales platforms
- Utilise targeted promotions and discounts to increase sales volume
- Invest in A/B testing to refine marketing and sales approaches
- Collaborate with sales teams to better align product offerings with customer needs
- Use user feedback to improve and innovate product offerings
- Implement retention strategies to increase lifetime customer value
- Monitor revenue streams to identify seasonal trends and opportunities
- Regularly review product KPIs to ensure revenue targets are being met
Bringing accountability to your strategy
It's one thing to have a plan, it's another to stick to it. We hope that the examples above will help you get started with your own strategy, but we also know that it's easy to get lost in the day-to-day effort.
That's why we built Tability: to help you track your progress, keep your team aligned, and make sure you're always moving in the right direction.
Give it a try and see how it can help you bring accountability to your strategy.
