Small business owners are always devising “killer” marketing or ad campaigns that – in theory at least – will send business soaring. Whether created in-house or with outside help, it can be a great concept, with sparkling design and a compelling message and yet still bomb big time.
What’s up with that? In most cases it’s simply because you didn’t think beyond a great-looking ad, perfectly crafted email, irresistible offer, rousing radio spot or breakthrough banner. Those items – the so-called “creative” – are but one piece of the marketing effectiveness puzzle.
The missing piece, or pieces, are often a data-driven strategy for getting the message into the right places arte the right time with the right frequency to make the effort truly pay off the way it should.
Another way of framing this issue is to ask a relevant question: Does marketing success come more from art? Or analytics (aka, science)? Some also cast this as a difference between “soft” marketing (art) and “hard” marketing (data-based).
Until recently, most marketers would have fallen back on the old 80/20 rule, explaining marketing is mostly about art, and much less about data or analytics. Lately some folks have made it out to be all about data and analytics – a reversal of 80/20 in the other direction.
In reality, it’s probably in between. Content (another word for creative) is, in fact, more important ever in a world hungry for good ideas, nicely packaged and digitally delivered, but drowning in a sea of digital mediocrity. Wearing your business owner’s marketing hat, your job is to build trust with customers and prospects by educating them about how what you provide can benefit their lives or businesses so they will think of you when they need what you offer.
In short, you have to break through the loud and constant “noise” of today’s digital, Internet- and social media-based world to make sure customers are hearing you.
Strategy and Analytics
Even the best marketing ideas will fail without proper planning, preparation and implementation. This is the strategy part. For example, what’s the main audience for your killer creative? If you’re fuzzy on that, you’re in trouble to start. And if you do know exactly who you want to reach, if you don’t know how or where to reach them, that’s another dark cloud ready to rain on your marketing parade. And if your offer or call to action haven’t been thought through, honed and tested, you’re similarly doomed.
Think of it this way. Even a mundane ad, direct mail piece, radio spot or email will generate some results if properly targeted. What you need is the best of both worlds to make it really sing.
And you absolutely need to learn exactly how and why your hard-earned marketing dollars are earning you a return or not, and what you can and should do in the future to squeeze every ounce of improved profit from your effort. Metrics-focused marketing starts with three main activities:
1) Setting goals and targets up front. These should include such things as how many incremental sales are generated, how much revenue each sale produces and the gross margin. In short, you want to know precisely what impact your marketing efforts are having on revenue.
2) Designing or selecting your marketing programs to be measurable in the first place. You’ll want to know the incremental contribution of each individual marketing effort you undertake in order to compare results.
3) Focusing on decisions that will improve your marketing results. The idea is to adapt and make changes along the way.
Here are three key marketing metrics most small business should consider:
• Lead Conversion Rate: Lassoing lots of leads is great. But converting them to sales is what really counts. Your conversion rate is the percentage of leads that ultimately become sales (10 sales from 100 leads = a 10% conversion rate). This also produces insights into lead quality and how revenue can react dramatically to even small changes in conversion rates.
• Revenue Per Customer: Once you know how much the average customer is spending, you can make better decisions on whether to focus on new customers, selling more to existing customers, or both.
• Customer Acquisition Cost: This boils down to what it costs you to gain a new customer. It’s a critical number to know for deciding what you can spend on your marketing efforts. If your revenue per customer is higher than your acquisition cost, you’re at least on the right track.
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