Marketing – the Top 3%. I recently heard that only 3% of all businesses have a marketing plan. Virtually every company out there does some type of marketing – but it seems that only 3% have a plan???
Whether you believe the statistic, or not, the statement begs the question: Do you have a strategic and systematic way of evaluating your marketing? If you are part of the 3%, that is great. But if you are part of the remaining 97%, then here are some things to get started.
In this blog, we will cover the following items:
- Evaluate your current marketing efforts by calculating your actual cost per lead.
- Make sure that you have a process in place to properly track (e.g. source) each lead.
- Be careful in evaluating lead quality.
- Consider adjustments to your marketing by identifying the most efficient categories.
- Think “outside” the box and try to develop a NEW source of leads that will lower cost per lead.
- Try to avoid “single source” marketing solutions.
Evaluate your Current Activities – Calculating Cost Per Lead
When it comes to evaluating your marketing activities, here are some things to consider:
- What are you currently doing for your marketing?
- How much are you spending on your marketing?
- How many leads are you getting from each type (source) of marketing?
- What is your cost per lead from each source?
Here’s an example:
Source Spend Leads Cost Per Lead
Radio $6,000 20 $300.00
Internet $2,400 12 $200.00
Print mailer $1,000 10 $100.00
Total $9,400 42 $223.81
In the example given, the highest number of leads relates to radio advertising; however, the most effective source of advertising happens to be the print mailer. As you can see, it is important to break-down and analyze your marketing. If a company decided to adjust its marketing budget, there might be a temptation to cut the source delivering the least amount of leads; however, as you can see, the source with the fewest leads is actual the most effective as it reflects the lowest cost per lead.
Lead Tracking
To ensure credible results and to ensure you are making correct decisions, it is very important that your lead tracking be rigorous and accurate. Every lead/prospect must be attributed to a specific lead source.
Here’s an example to consider. Most companies have web sites. A lot of people, these days, access companies via the internet and web sites. If you have a variety of marketing sources (e.g. radio or print, etc.) it is important that you are able to differentiate WHERE your customers heard of you not HOW they accessed you. For example, if you are doing radio advertising and internet advertising – both types of customers may contact you via your web site. It is important to have a mechanism in place to differentiate that – so that you don’t assume that EVERYONE that accesses you via your web site is an internet lead.
Evaluating Lead Quality
Of course, it is important to evaluate the quality of each lead source. In evaluating lead quality, try to be as objective as possible. In any organization, the sales team will be comprised of strong performers, average performers, and below average performers. DON’T make decisions on marketing based upon lead allocations. That is, at face value, the leads that have been allocated to the top performers (the group that closes the highest percentage of leads) will look like a better quality of lead whereas the real matter has to do with the quality of the sales person – not the quality of the lead.
Consider Making Adjustments
Simply stated, the goal is to attract as many of the “best” prospects possible at the “lowest cost per lead.” So, given the example above, you could consider eliminating radio advertising (saving $6,000) and re-diverting half of the spending ($3,000) to the print mailer category. In doing so, your results would translate as follows:
Source Spend Leads Cost Per Lead
Radio $0 0 $0
Internet $2,400 12 $200.00
Print mailer $4,000 40 $100.00
Total $6,400 52 $123.08
Note the improved performance. The overall spending is less, the leads have increased, and the resulting cost per lead has decreased.
Consider NEW Marketing Sources
Sometimes, and from time to time, it is important to re-evaluate your overall game plan and ask the question: “Is there a better source of advertising that I have not considered.” In doing so, your goal is to come up with an entirely new way of prospecting that you haven’t considered before. In other words, rather than merely creating a better mouse trap, you ask the question “Is there a more efficient way of dealing with my mouse problem?”
Here are some things to consider:
- Who is your target customer?
- Where does your customer congregate?
- How will you reach your customer?
- What kind of offer will you compel them with?
- How much will your marketing efforts cost you?
Consider a Variety of Sources
Most of us have heard the concept of synergy. Synergy can be defined as 1 + 1 = 3. True, the math doesn’t work; however, the concept is real. When you are evaluating your marketing there may be a temptation to simplify and eliminate everything but the one source that generates the lowest cost per lead. Try to avoid this. There is something to be said for creating impressions from a variety of sources – rather than a single source. The affirmation of a consistent message from a variety of sources makes an impact. This doesn’t mean continuing to advertise in an area that is not productive – but it may mean re-allocating your spending away from high cost per lead sources to lower cost per lead sources.
Conclusion
I hope that the preceding has been helpful to you. If you would like additional information or assistance in getting your own process up and running or re-evaluated, we are here to help.
Think about it!