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.
We provide a FreeMarketing Analysis for businesses interested in learning how they can generate better returns on their marketing investments. We’re also happy to schedule one freeconsultation if you would like to speak with one of our Managing Partners; email@example.com, or (303) 562-4744.
Remember, if you can’t measure it, you shouldn’t invest your money in it.