We all default at looking at things from a cost perspective. Regardless of what we are buying cost is always an overriding issue for most of us, think about it when was the last time the cost of something didn't enter your mind as a major initial consideration. When considering your marketing efforts it helps to move away from the cost and consider the actual value of the proposed efforts to see if it is worth doing.
Cost is relatively simple to calculate you consider the resource demands (time, money personal, etc.) and estimate what the project's demand will be. So if your considering a direct mail campaign and you will be designing the project in house you would add the cost of the campaign and the cost of your personal's time who has to handle the design and reach a cost factor.
Value is harder to calculate. The value of a campaign considers the return on the investment, how much new revenue you will generate for your resource expenditure. You should be able to estimate the return on any marketing effort before you do it, better said if you can't estimate the return don't do it. Marketing is part art part science and if you want to build your business more focus has to be on the science, your not making art for art's sake you're trying to make money.
Cost is relatively simple to calculate you consider the resource demands (time, money personal, etc.) and estimate what the project's demand will be. So if your considering a direct mail campaign and you will be designing the project in house you would add the cost of the campaign and the cost of your personal's time who has to handle the design and reach a cost factor.
Value is harder to calculate. The value of a campaign considers the return on the investment, how much new revenue you will generate for your resource expenditure. You should be able to estimate the return on any marketing effort before you do it, better said if you can't estimate the return don't do it. Marketing is part art part science and if you want to build your business more focus has to be on the science, your not making art for art's sake you're trying to make money.
So how do you estimate revenue from your marketing efforts? Start with some industry standard numbers. For instance:
Email Marketing- click through rates average from 2% for B2C unfiltered list, to 20% for B2B highly filtered list. If this is your first time sending to your list figuring a 5% click through rate is reasonable, if you bought a list figure on 2%. You use click through rates because that is really the point of the email blast. Clicks are all you can ask from your marketing whether or not they contact you is determined by the landing page engagement not the email marketing effort.
Direct Mail - generally direct mail will get a 1 - 5% response. If you can get a consistent 3% response rate you have either an outstandingly executed campaign or a very well scrubbed and responsive list. If this is your first contact with this list figure on 1%.
Radio & TV advertising - both are very difficult to track from an ROI perspective but using a special promotional code or message can help you track people who contact you because of these ads. Both of these types of campaign require significant budgets to be effective since you need to repeat the messages over and over to get any results.
Print Media advertising - again difficult to gauge return and again promotional codes help. Print media also requires a larger budget to make an impact since your buying access to eyeballs and the more valuable and targeted those eyeballs are the more you can expect to pay.
Online Ads - online ads are easy to track (most platforms like Google have great dashboards to monitor your results) and are very flexible to your budget. The average conversion rate (sales from click through) tends to be in the 2.5 -3% range however you want to work to getting up to the 10% range which is practical since you have control over every aspect, the audience your ad is appearing in front of the ad itself and the landing page the prospect ends up on. One of the most attractive aspects of online ads is the ability to make changes that can immediately improve your conversion rate. When we changed our contact from to an easier more modern one our conversion rate almost doubled & has maintained that rate ever since.
Intentionally I skipped a couple marketing vehicles: social media, trade shows, and networking events. I love social media, use it, in fact there is a good chance you are reading this because of our social media efforts, and I still wouldn't pay for advertising on social media. I consider it being the guy who shows up at a house warming party trying to sell everyone tires, while you may have the best tires in town, and sure everyone needs tires nobody wants to hear about tires at the party. Tradeshows can be great or they can be giant wastes of resources depending on how they are done, who does them, how they manage the booth, etc., way to many variables to consider. Networking events, like trade shows have way to many variables to calculate.
Once you can estimate your return you can see which marketing efforts should generate you the most bang for you bucks. Obviously your budget will greatly dictate what avenues you attack. But regardless of the budget make sure you can estimate and track the performance of all your marketing efforts tracking is key to identifying what is working and what needs changing and if you cant track it you really have to consider whether its worth the efforts.
We help clients craft, execute and monitor their marketing efforts as we help increase revenue. If you would like more information on how we can help feel free to contact us today.
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