Let’s face it — marketing your business can be hard. From looking at your data in various analytics platforms to a basic spreadsheet, it can all feel quite overwhelming. Even the metrics within Google Analytics have changed so much over the last 20 years that Google had to update their platform to Google Analytics 4 in the summer of 2023. This update aimed to address data privacy concerns, integrate artificial intelligence (AI) and enhance understanding of the consumer path to purchase.
So, how do we control the chaos within the marketing industry, save time, make money, run a business and know what’s truly working?
Marketing Mindset Shift
The paradigm has shifted from looking at marketing as a sunk cost, to understanding the concept around a profit-driven marketer. Simply put, your marketing budget shouldn’t be dictated by what you feel like spending; instead it should be looked at with your business goals in mind. When you figure out what your goals are, you will need to mathematically understand the budget to get to that goal. If your goal is to sell more gallons of propane, work through the sales math that makes sense to come up with your marketing budget.
To further look at this example of selling more gallons, ask yourself:
- How many new contacts does it take to get one estimate?
- What is your business’s average close ratio?
- What is your business’s average order value?
- How many orders are fulfilled per year on average?
- What is your lifetime customer value?
- How many referrals does the business usually get from each customer?
- What is the typical duration someone will shop around for the services you are providing?
- What’s the opportunity cost of showing up for one out of three searches instead of one out of eight searches?
Marketer Mindset
When I Google myself, am I happy with what I see? Is my business the answer to my prospect’s questions? What am I doing to establish trust online? As we start to understand the answer to these questions, we can start to pivot our mindset to determine a comprehensive marketing budget.
When we bring these two mindsets together, it begs us to start thinking of the opportunity cost of not being involved in the entire conversation the shopper is having. If the consumer doesn’t find you at the beginning of their research journey and you only want to show up as an unfamiliar brand when they search for a keyword, will the potential customer choose to do business with you? Or would they rather work with a business that has been by their side every step of the way, from the original research phase to the in-between stages of evaluation, all the way to the point of purchase, leaving a brand review and even giving referrals?
To start taking the steps to being an efficient goal-based marketer, look at the data around your campaigns. Once a campaign is up and running, give the platforms the fuel they need. To do this, target the right-sized audience with enough of a daily budget.
We often want to focus on spending a certain dollar amount over the month, quarter, year or promotion period instead of focusing on what daily budgets yielded the greatest results. It’s also not as simple as “spend twice as much to get double the number of leads.” Once you start to see behaviors in your data that you can extrapolate, you should be able to narrow down your budget to one that yields the maximum results.
Marketing Math
For example, if your marketing budget is predetermined at $3,000 a month, that means you should be spending around $100 per day over 30 days. Now on some days, there is enough of a reason to spend $200 a day, so you are forced to spend $50 the following two days to get back on pace for the month. What was the opportunity cost of missing out on those leads? Taking this a step further, every day that you spend $200, you get three new contacts at around $66 a contact. That means on days you spend your exact budget, you can afford to get one new contact.
Conversely, the days you must pull your budget back to fit your month, you get a lead every other day since you are very rarely hitting that sweet spot of $66.
When you start to do this over a longer time period, you will want to finesse your campaign into the right daily budget to allow for the right time of lead flow you need to get to the right number of contacts. Am I telling you to get rid of your budget? Not at all! We are formalizing what your marketing budget really should be for the goals you are looking to achieve.
Beyond Revenue
We also want to consider how we are now building up our first party data lists for all the people who said they were interested in your service and didn’t sign up this year. With the death of the third party cookie, first party data is becoming increasingly more valuable. This leads us to use this data to target users across the internet, as well as a lead list for your sales staff.
So, while it seems counterintuitive at first that spending more will decrease your cost per contact, we want to think about how all the metrics work together. This will lead to more leads!
It’s Simply Marketing
Another element we want to shy away from is only talking about marketing efforts in silos, especially if you are working with more than one marketing vendor. Ideally, by being transparent in all your efforts, the agency of choice will know how to work to support the overall goal of business growth. Remember, it's not digital marketing vs. traditional marketing — it’s simply marketing, and it all works together.
Another key benefit of having a trusted agency partner instead of piecemealing your marketing is saving time by not having to manage too many partners. If you are striving for efficiency to grow your business, you need to not add on job roles/functions of managing vendors only. By partnering with a subject matter expert, you will avoid a lot of the pitfalls many business owners face.
One of the many analogies that help business owners understand how all of this works together is the visual of a wagon wheel. Your website needs to be the centralized hub with the spokes creating that fly wheel effect. The spokes are social media community management, online reviews, search engine optimization, pay per click, email marketing, display ads and so on. We want to make sure those spokes all point back to the centralized hub.
Focus on the Right Leads
It isn’t a race to the bottom! Does the cost per click really matter? What about CPMs (cost per thousand)? Both metrics are set by your targeted audience. If you are going after an audience that has disposable income, they won’t question pricing and so on. Isn’t that what all the other major brands want too? Due to the nature of ad buying, the supply and demand to get in front of the right person will be more expensive than just getting in front of as many people as possible.
The same can hold true in pay per click advertising. Many times, we will see marketing reports discussing click price trending down, which should be a good thing, right? Well, if a cheap $3 click gets you nothing more than a site visit, and a $5 click gets you a qualified lead, what’s more valuable? We should all be saying the qualified lead.
AI/Machine-Based Learning
Did you know that AI has been around since the 1950s? When you are looking at the effectiveness of the technology, it’s important to have an understanding of how it’s being used.
Don’t fall for the next person who says they have AI marketing. We want to see how their application will solve a problem for your business to get to where you are seeing more efficiency in your business process and marketing. For over a decade, we witnessed a birth of analytics platforms to help clear up the muddy water; however, there is a ton of redundancy in these platforms. We also have a buying problem where people always want the new shiny object without understanding how it’ll fix their business or how much work they need to put into the analytics platform to extract meaningful insights.
Goal based marketing = marketing tactics + marketing strategy + technology platforms. Make sure you are looking at the right data about your own business to help you understand the data around your marketing team. Take the time to know your numbers and see where there are gaps. There is a core difference between sales and marketing. The marketing goal is to get the leads to you. We can use zero party data around user experience to understand what your audience is telling you to help improve your own business process. Lastly, always make sure your business is being helpful! If you are the most helpful along the way, the rest will fall into place.
