The critical numbers for Tutors By The Numbers should show both the ingredients and results of the successful marketing efforts over the next three years. These tracking methods will be used to track these critical numbers:

• QuickBooks to track sales and expenses, average transactions per customer, and average monetary value of transactions
• Salesforce CRM to track leads generated and converted
• A custom chart in Excel to track testimonials and PR mentions

The CEO is currently responsible for these programs and they will be increasingly handed off to the Sales Associate during 2011.

12.1 Sales Forecast

The tutoring service business is somewhat seasonal, with tutoring sessions generally beginning either in the summer (~July), the fall semester (~September), and beginning of the spring semester (~January). Sales are expected to ramp up slightly in 2011 as marketing initiatives begin to have an effect, and increase more rapidly in 2012 and 2013. Additional tutors will be added to the company to increase capacity, up to an expected 30 part-time tutors by the end of 2013. Direct costs for tutoring sessions are primarily the wages paid to tutors. A small percentage is for tutoring supplies, such as print-outs, pens, pencils, and calculators.

Sales Forecast

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12.2 Marketing Expense Budget

The marketing expense budget includes all costs of new marketing initiatives outlined in the Milestones chart as well as ongoing marketing costs Tutors By The Numbers has incurred in the past.

Ongoing marketing activities will continue to be funded and grow a modest amount each year. These include newspaper advertising, radio advertising, and online advertising.

New initiatives that are expected to be funded increasingly each year if they are successful include graduation program advertising (there are a large number of area schools with which to potentially advertise) and bus stop advertising (intended to be spring season advertising for the first year and then both spring and fall advertising campaigns in 2012 and 2013).

The customer referrals program (discounts granted both to existing clients and to the referred clients) will ramp up with the success of the program and expected growth in sales. Likewise, education panel expenses will increase as 1 panel will be planned in 2011, 2 in 2012 and 4 in 2013.

The website redevelopment and general rebranding will be higher costs in 2011 than in future years due to the initial investment required in these areas.

Overall, sales and marketing expenses as a percent of sales is expected to decrease over the next three years as the marketing initiatives of 2011 pay off, conversion rates increase and referrals increasingly drive business.

Marketing Expense Budget

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12.3 Key Marketing Metrics

The number of leads and conversion rate will be the primary drivers of increased revenue. The conversion rate is expected to increase with systematized sales efforts and the increasing strength of the Tutors By The Numbers brand. Furthermore, an increasing number of annual transactions per customer (from .1 per month - 1.2 per year average to 1.8 per year average) will fuel revenue growth. Average revenue per customer transaction is also expected to rise as more full-year and double-session programs are sold relative to the basic 15 session sets.

Referrals will be a major component of the increasing number of leads, as will leads generated by an increasing number of PR mentions. These PR mentions will grow in large part due to the education panels which will be large, public events. Testimonials are expected to be achieved from roughly one third of clients. They will be sought from half of clients and the best will be used.

Key Marketing Metrics

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