What is the best way to spend my marketing budget?
- 28 Sep
This is a question that we get asked a lot and while it's understandable that people are looking for a single, unambiguous answer, the reality is it's influenced by many factors ranging from the nature of the product or service to where the business is in its life-cycle.
The question should really be: "how can I find the best way to spend my marketing budget?"
Marketing is a process and one that successfully integrates a number of channels. There is rarely a single or ‘best’ channel that can be fully effective on its own, but some will undoubtedly perform better than others. The challenge then is to find those best performing channels and to become truly expert in them. This inevitably involves an element of testing and learning and, like it or not, you are going to spend some money on activities that won't work as well as you hoped while you're doing this.
If you don't know the answers already, your first phase activities are going to be focused on establishing:
- How many of the right type of customers can be found using a particular channel or combination of channels
- What the conversion rate is
- Where you are losing people in your sales funnel
- The cost of acquisition
This will involve testing channels that will help you to be found by potential customers that are looking for your product or service now (e.g. Google Ads), and directly targeting and nurturing the types of customer that you know you want to do business with in the future (e.g. Email).
Once you have traffic, you will quickly get a handle on the main metrics and can take action to improve them.
For example, a client of ours had recently launched a new investment product. Visitor numbers to the website were quickly accelerated using well targeted Google Ads and social media, and people started signing up for the free trial in good number. We found, however, that people weren't engaging sufficiently with the product during the free trial and, as such, paid for subscriptions at the end of it were disappointing.
This caused us to turn our attention to increasing engagement during the free trial with the use of email and more explainer content. This had the desired effect and as many users converted to paid sign-ups in the following four weeks as had been seen in the six months previously.
Google Ads and social media are often the 'go to' first choices for trial because you can quickly achieve visibility and distribution in a target-able and measurable way. They are, though, far from the only options: any combination of SEO, PR, content marketing; trade shows; direct mail affiliate marketing and referrals, to name but a few, could be right for a particular product or service. You need to start with your experience or instinct to make the first choices and quickly move to controlled and structured trials to let the data do the talking.
The important thing in all of the above is to know what is working and what isn’t and what the status of any individual named prospect is. If you don't, your budget will quickly be exhausted. This means being heavily focused on analytics and using the right marketing technology to make objective decisions based on A/B testing and results.
After running some trials, you will find 3-5 marketing channels that will work much better for your business than any of the others. As soon as you have identified these, you can drop the remainder and put all of the effort into fulling optimising the best ones.
For help with setting up and running controlled trials to find the right marketing channels for your business, please contact us.