Maximizing Business Revenue from Every Marketing Dollar
By Warren Kolber
Are you generating new, repeat, and
referral business from your marketing in a profitable way? That’s the question
you need to ask yourself.
The ability to measure, communicate, and
grow the contribution of marketing investments is a critical factor in your
business success. With so many potential customers using the Internet to
research, locate, educate, compare, and check everything from reviews to prices
to products to location, the businesses that master digital marketing often
find themselves with an advantage over their competitors. If you invest a $1 in
a marketing activity do you know approximately how much to expect in return?
Most marketing experts suggest that
generating $5 in revenue for every $1 in cost is a good target; more on this
later in the article. Once you know your target you can begin managing your
business based on performance, customer, and financial data. The single most
important task that you must accomplish to earn the highest returns on every
dollar that you invest is to learn as much as possible about your ideal
customer types.
You need this information to be able to
map their wants, needs, and behaviors throughout their entire buying journey.
The type of information that you’re looking for includes; why they wanted or
needed the product or service, how they began their search, what was important
to them in making their decisions during their buying journey, how long did the
entire buying cycle take, etc. The best
and least expensive way to do this is by connecting with your past customers.
Also, very high on the list if you want
to generate high returns on your marketing is building your email marketing
list. On average, Email marketing generates $44 for every $1 spent. Even more
important, research shows that email is consumers preferred channel for
promotions, with almost one-third listing email as their top choice.
Today, most consumers start their search
for a business, product, or service online. Many consumers use online research
in place of the traditional buying cycle. In fact, 81% of people go online
before visiting a store. For major purchases, people may spend as much as two
to three months online. In many cases, by the time a customer contacts a
salesperson, their deep into their buying journey. To ensure that consumers
have a great experience you need to make it quick and easy for them to access
whatever they want on your website. This means moving the content about you and
your business to secondary pages so your website home page and its primary
navigation can focus on helping people access what they want.
Don’t forget that many people now go
online using their mobile device. To give you a better idea of the power of
mobile search, Fifty-five percent of mobile searches resulted in a conversion
within one hour. Your website needs to
automatically detect what device someone is using and automatically create a
mobile friendly version of your website in less than one second. The good news
is that this is easy to do, and it should be included in most modern
websites.
Third person opinions about your
business are more important than what you say. Investing a very small amount to
generate new reviews, and implementing a system to uncover negative customer
experiences before they’re posted online is a very low cost way not only to
increase the conversion of website visitors to leads and customers, it also is
very valuable in Google search rankings or search engine optimization (SEO).
At an absolute minimum, you need to
cover your costs of any marketing campaign. Your costs include whatever you
invest in the media you use, producing ads and content, fees you pay to others,
and your cost of acquiring the product you sell. If you only generate twice the
revenue as the cost of the actual marketing, it’s possible that your production
and other costs would eat up any profit that you would have made.
You do want to consider the Lifetime
Value of each new customer when you calculate your return on any marketing
investment. To do this you have to calculate all the revenue that customer will
generate over their entire lifetime as a customer, and this should include any
revenue generated by your business from new clients that a customer refers to
your business.
There are numerous tools that you can
use for very low cost to help you collect the data that you’ll need to make
these calculations. Our top choice for small businesses is Marketo and Hubspot,
and for larger businesses Pardot.
I started this article by mentioning the
importance of performance data. We see way too many expensive marketing
agencies and experts design programs that do not generate the performance data
that is needed for a business owner to evaluate and refine the programs they implement.
URWAConsulting strongly recommends that
you find a firm or professional who will help you deign marketing programs
based on your ideal customer’s buying journey and measure everything.
Remember, if you can’t measure it, you
shouldn’t invest your money in it.
