I like to collect quotations, which I use to inspire my small business clients and challenge their thinking.
Let me give you two examples:
- “The Number 1 question for the management of any enterprise is: ‘How are you going to get NEW customers?’ ” – James Malinchak
- “The highest paid skill on the planet is bringing new customers through the door.” – Dan Kennedy
Put these together and it follows that any business owner might pay generously for somebody who has the marketing skill to bring them a stream of new customers.
And why not? With a predictable, measurable, marketing system you’ll know exactly what results you’re getting for your expenditure.
However, I recently spoke to a large auto dealer, selling prestige marques from three locations, who said he isn’t exactly sure which marketing activities bring in sales.
He said whatever he’s doing is working overall, and he is comfortable with the result he’s getting for what he’s spending. But he was reluctant to spend more in case it had no effect and equally reluctant to make changes, in case sales fell.
Clearly he hasn’t taken skilled advice, because he can’t measure his results.
Now, think about what you currently pay for. There’s media advertising, direct mail, SEO, online advertising (AdWords, or Yellow Pages), sales promotions, social media, and probably a whole lot more.
So are you happy with your Return On Investment? Or, like the auto dealer, would you say you’re not sure what’s working?
For some reason, these days, many owners and managers see their marketing spend as some kind of gamble. Dan Kennedy, again: “There’s nothing more frustrating for a business owner than writing a cheque to their media sales rep and wondering what result that expenditure produced for the business.”
And yet you’re supposed to know what’s working. You should be able to spend a million dollars a week on your marketing, because it’s bringing in five million.
If that sounds ridiculous, it’s not. (Well, except for some issues with stock, staff, floor space and working capital!) But there are companies who spend TWO million dollars each WEEK on convergence marketing. Sure, that’s for a national campaign, but it’s a fact.
Convergence marketing is a mix of direct response marketing with online permission marketing. The leads generated and subsequent sales are all measurable.
If you were offered a system that would bring in new customers and new revenue, then I believe your only question should be: “Is it measurable?”
Most business owners ask, instead: “What does it cost?”
Yet, within reason, the cost doesn’t matter if the system can deliver a positive ROI. After all, if you know you’ll get $100 back for every $10 bill, then how many $10 bills will you spend ?
Some might say, “I’m okay. I’m doing price and product advertising and I just measure the sales generated.”
That’s fine. You have a measurement. But I hope that campaign is only for a special sales event. Otherwise you risk your business being perceived as a commodity supplier, differentiated only on price.
When price is the only differentiator, it’s a race to the bottom.
However, advertising is only a part of your marketing plan and, hopefully, you’re using a variety of techniques, apart from price, to position your business as the supplier of choice for the products and services your customers want, when they’re ready to buy.
My suggestion: analyse your marketing and measure the ROI for each activity.
You’ll find some forms of marketing are more effective than others. For example, research by Woo Commerce shows that, despite all the focus on social media, the reality is that email marketing still outperforms social media 8 : 1 .
In fact, Jim Cockrum, a professional internet marketer, quotes research showing that email marketing returns $50 for every $1 spent. You can measure open rates, click-throughs, sign-ups and sales.
When you’ve completed your review, you may have identified some potential improvements.
For example, radio advertising isn’t usually measurable, except for sales, because you can’t tell who actually hears the commercial. But you might change the copy in your message to promote an offer on your website. Now you can analyze traffic statistics and then the sign-up rate to your offer.
If you add those sign-ups to a database, you can make offers by email and then measure the conversion rate and the revenue.
Focus on measuring your outcomes and, before long, your monthly sales will reflect the improvements in your marketing. As you direct your expenditure into more effective activities, your business will grow.
A last word, from H. James Harrington: “Measurement is the first step that leads to control and eventually to improvement.”