Marketing strategy: invest where it matters
Making your marketing money deliver its maximum impact is critical to your long-term success.
Before clever optimisations and tactics, it is about setting clear goals and investing in the right channels.
We will start from defining your goals and define what an acceptable cost per channel look like based on your revenue per customer.
We will then map the market to identify your key opportunities and build a plan accordingly.
Define your marketing goals and benchmark
Map the market to identify opportunies
For your growth to be sustainable, you need your cost of acquisition for new customers to be less than the margin that they will generate for your business over their "lifetime". Sounds logical, but it means that we first need to understand what this lifetime value is and how it builds up over time.
Then, we need to identify the lag between the time when you incur the acquisition cost and the breakeven (which could be at the 1st, 2nd or further transaction). For an aggressive growth strategy, this will define your cash-flow requirements based on the number of customers you want to acquire.
Once we have defined what good looks like, we need to track both the cost per acquisition and the lifetime value to make sure that the model is sound. Techniques such as cohort analysis can be very useful.
The mission of Marketing is then to both increase the lifetime value through CRM, and improve the cost per acquisition by growing the most efficient channels, improving conversion and the campaigns execution.
In most cases, you are not the only one company operating on your market.
Understanding which channels and terms the customers use to enquire or buy a product in your market provides invaluable insights for your marketing strategy.
Whether the market is heavily skewed towards Brand searches, is primarily driven by local search, or is essentially reliant on generic search, will shape very different marketing priorities. Read the stories here in the blog.
The detailed analysis of the search data then provides an immediate estimate of both the size of each term category, as well as your share of voice: are you missing out on a number of popular relevant queries for your market, are you covering all the key questions or values that customer expect?
Given that search often accounts for 60% of the traffic to a market, harnessing it effectively is critical for the success of your company. Read the article on strategic search to see it in action.
Adopt a robust and pragmatic measurement approach
My "Maslow" pyramid of marketing channels
Measuring the marketing efficiency precisely is a harduous task, especially with a complex marketing mix.
Pragmatism is about separating the process in two components:
managing the mix and monitoring the impact on the overall efficiency;
improving the individual effectiveness in each channel
Econometrics and attribution techniques are very useful to inform changes in the marketing spend, but must be validated by monitoring that any increase/decrease translates delivers the expected results.
Each individual channel will be expected to deliver specific key performance indicators: for instance, in organic search, we can relate the incremental visits to the cost of the content and links, and thus measure a marginal cost per visit.
For Brand, we will be looking at the trend in direct and brand searches.
For CRM, we can measure how incentives and rewards affect the retention.
At last Performance marketing provides a wealth of detailed metrics, which contributes greatly to its popularity. It comes at high cost though.
Having had to manage 8 figures budget, this method consisting in a in-depth understanding of each channel, and pragmatically steering the overall mix has delivered consistent and perennial results.
Being visible in search is a fundamental hygiene factor. It starts by articulating the services provided by the business and, for the local part, referencing your business consistently in Google My business and the relevant directories.
Whilst SEO can be quite technical, the guiding principles are about relevance and sound customer experience (speed, usability, conversion): good marketing principles to adopt anyway.
Being visible in search means "free" traffic, a significant competitive advantage in the long run.
CRM is similarly obvious: it is much more effective to retain customers than acquiring new ones. It is also a fundamental principle that your customers are your biggest asset and need to be nurtured.
Brand marketing generally involves buying media space to make your audience aware of your products. Building a brand requires a lot of consistency to deliver on the promise and is likely to constitute a sizeable investment. It has however a lasting effect on customer acquisition.
Performance marketing can delivers traffic fast by tapping into an existing demand. The cost per acquisition is high though meaning that it cannot compensate the lack of more sustainable channels.