By Steve Lapa
Lapcom Communications Corp
We haven’t even hit Q4 of 2021 and we’re talking 2022?
Yes, and yes for sure. As we push into October and the balance of Q4, before you can hit the send button, 2022 will be on your budgeting agenda. Start thinking now about how key metrics will play into your game planning for next year. This cycle will require more thought as we navigate the sales recovery from a COVID-impacted 2021.
Let’s tackle three simple analytics that typically form the start point for any ad sales budgeting process.
- Average order – This is the most fundamental number you need to know as you start the process. Look back on 2021, COVID and all, then 2020. Calculate the average order by month, including your base billing. Look for trends. Did order size increase during any months? Decrease during any months? Careful of promotional and seasonal sales skewing your numbers. If so, will those deals and packages come back or be gone forever? Any new opportunities you know are on the runway for 2022?
- How to grow your average order. There are only two ways to grow your monthly average order. Rates or volume. New business will increase your TOTAL monthly sales, not necessarily order size. Yet, this three-legged stool is your foundation upon which you can build earnings in 2022. Each leg of the stool should be worked and reviewed every 30 days. Your quarterly analysis should include adjusting the time and focus balance of each.
- Attrition vs. Renewals – Here is where we look into the mirror and jump on a scale. Get real with yourself, if you want your income to grow next year. Calculate the percentage of business that will not renew due to business circumstances beyond your control. If your number is over 40%, time to start thinking about shifting more time into the new business column, with an eye on order size. Time and focus on prospecting to blunt the impact of that attrition is important.
Every organization has a formula and methodology for budgeting, planning and adjusting. Spreadsheets and computer forms took the place of yellow pads and pencils, which replaced the table napkin and pen. Despite all this progress, nothing takes the place of clear thinking, focused evaluation, and a little help from an experienced manager. Plan today to succeed tomorrow!
Steve Lapa is the president of Lapcom Communications Corp. based in Palm Beach Gardens, FL. Lapcom is a media sales, marketing, and development consultancy. Contact Steve Lapa via email at: Steve@Lapcomventures.com