This is part 2 out of a 4 part series this month, highlighting my Top 8 New Years Resolutions for IT Marketers.
New Years Resolution #3: Leverage MORE of your EXISTING assets.
To do this I suppose you need to recognize what your current assets are. That would be your current customers and (hopefully) the relationship you have with them. I would also include any unconverted leads you have (you ARE keeping those people in your database and marketing to them, right?) Could be a marketing process or campaign that has worked in the past. Could be relationships you have with influencers in your market area, JV partners, your reputation, your location, etc. Below is a forum posting I wanted to include here because 1) it will help me make the above point, and 2) it will help me make a point about the NEXT New Year’s Marketing Resolution.
First, here’s the post, modified slightly for space and readability: My AT&T Yellow Page ads are up for renewal and I wanted to get some suggestions from you all! I ran the Warning ad last year under the heading “Computer Service and Repair” in one of the local books where we are located and got very few calls from it. I was thinking about running the same ad again in the same book, but this time under two headings: Computer Service and Repair and Computers Networking. I’m also considering adding it in two other books to saturate the surrounding areas. One would be in the capital city area (much larger book and distribution) and the other book would be targeting South of us. The pricing for this is very expensive even after all of their “discounts” and was wondering how much of your budget you all dedicate to this type of advertising? Our existing ad costs $213 per month for ONE heading.
Option 1: Renew our existing ad in the same book under TWO headings for the same cost ($213 per month). They’ll give me this deal if I commit to the advertising in the other books. I could also add the same ad to another small book for an additional $101 per month.
Option 2: Total for the two small books = $315 per month.
Option 3: I could also run the Warning ad in a new larger book under TWO headings for a cost of $741 for each heading, PER MONTH!
Option 4: Try their NEW program for $33 PER CALL for each heading.
Option 5: Run the ad in all 3 phone books for $315 per month plus $33 PER CALL for the large book.
Option 6: Pay $315 per month for the two small books + $741 for one heading for a total of $1,056 per month.
Option 7: Pay $315 per month for the two small books + $741×2 for one heading for a total of $1,797 per month.
Money is limited and we have just begun the following:
1. Mailed a newsletter to our existing clients.
2. Hired a telemarketing firm to scrub our list, qualify the leads and set up appointments for us.
3. Mail postcards to prospects.
4. Budgeted $1,000 for Google and Online PPC.
5. Implemented Call and Online tracking to see which of our ad campaigns are working best.
Money is limited, and I know we need to be listed in the phone books, but just didn’t know how much of our budget should consist of the books (in percentage). In the past, we have found that we get the best quality leads from our Google PPC ads…Thanks!
Okay, a few things. First… I think the first thing you need to do is figure out how much your AVERAGE customer is worth to you over a year’s time in both top line revenue and bottom line profits. The reason you are struggling with the “what do I spend” question is because you don’t have the facts straight about what a customer is worth. Once you know what you can afford to spend to GET a customer, it’s incredibly easy to know what to budget. Second, I can tell from your comments and capitalization that you think $33 per call (which I’m assuming you mean per lead or per response from the ad) is expensive. I can assure you it is not. It’s EXTREMELY important for you (and everyone else reading this) NOT to get emotional when making marketing decisions, which, from your post I can sense you are. The average cost for generating a lead runs somewhere between $150 to $500. Therefore, $33 per call is dirt cheap even if only one in ten turns out to be a good, legitimate lead. Remember, marketing is simply psychology plus math. You have to know how to do logical (not emotional) math. Let’s run the numbers for a minute…
Let’s suppose your average customer is worth $8,000 a year in sales, of which $3,000 is profit. Let’s say you go for Option #5 and spend $315 per month PLUS pay $33 per phone call generated. I don’t know how many calls you generated from the last ad (you said a few, but is that 3? 8? 15?). For this illustration, let’s suppose you only generate 6 calls for the entire year. Therefore your costs are:
$315 x 12 = $3,780
$33 x 6 = $198
Total Spend: $3,978
Now, let’s suppose you only close 2 sales, which is 33% of the leads generated. That would give you a profit of $6,000 (based on the assumptions above) giving you a NET profit of $2,022 PLUS two new customers which, hopefully, you’ll leverage for more sales and referrals, not to mention 4 unconverted leads which at SOME point—if marketed to correctly—will turn into a sale or two. I would suggest you look back historically from this last year to get your own factual figures and make the decision.
Another thing I need to stress is tracking of the leads. You said it generated “a few.” How do you know? Are you using tracking phone numbers and a unique URL? The phone book can give you that type of number to track, and perhaps you did that. If so, well done. It’s SO important to track where clients are finding you so you can make more intelligent decisions about future marketing, and I’m NOT just talking about straight ROI. I can assure you that if you look, there is a trend for where your BEST customers come from that might not provide the highest ROI (return on investment) or the best response; but in the long run, turns out to be more profitable. For example, our best customers come from seminars. They stay clients longer and hardly ever refund (refunds from people who find us randomly online are 4 times more than those coming to us through seminars). So, while seminars are expensive and time consuming, I’m still going to use them to attract new customers.
Another example: Our spokesperson and Genius League Member Randy Hall, President of Worldlan Technologies, discovered he has a 74% closing ratio on lead generated by direct mail, and only an 11% closing ratio on leads generated via telemarketing. This makes perfect sense to me since leads generated from direct mail (or other direct response elements) are coming from “pull” marketing, where as leads coming from telemarketing are resulting from more of a “push” type marketing. If you do decide to run the ads and you run two in the same book, make sure you use different phone numbers and URLs for each so you know what heading generated the best response. You also don’t mention if any of those leads turned into sales and if there was any positive ROI. If you generated ZERO, then why? Were they terrible leads that were just unqualified, or were they the type of clients you’d like to have, but just did a bad job at closing them? If they truly were unqualified, then why are you considering spending MORE money advertising in those books? This goes to my point about making sure you are leveraging the assets you have, and answering your question about where to spend your money. I would urge you to FIRST look at what assets you have right now that are underperforming or that, with a little attention, could generate significantly more and better results. For example, do you have a process in place to ask for and reward referrals? You said your Google AdWords is paying off; perhaps you could take the Yellow Page ad money and invest more there, or into getting someone to help you tweak the ads to perform better—or simply double your advertising budget. If you’re getting a positive ROI, why wouldn’t you? I would also be tinkering with conversion using the techniques I’ve outlined in the Toolkit session on web marketing. That traffic you are generating is an asset—therefore, converting MORE of it is an instant way to increase revenue and ROI without spending more.
Have you tried the “5 Around Drop” or canvassing campaigns? Those are cheap ways to generate new leads and prospects. What about JVs? I didn’t see you mention that, but that should be on EVERYONE’S marketing diet. Overall, you’re doing a GREAT job because you’re doing something. Keep an eye on the numbers and keep implementing and tweaking; I can assure you this will continue to get easier and you’ll continue to get smarter about where to invest your marketing dollars sooner than you think; but keep seeking to improve the existing assets you have in selling more services to your existing customers, generating referrals, and the campaigns that ARE working.
New Years Resolution #4: Test more NEW ideas and fail MORE
Continuing on from above, I also want to point out something very important: Not everything you do will give a solid return and you shouldn’t expect it to. In marketing and in business, you have to constantly take risks and try new approaches and strategies, setting a certain amount of money aside for testing new ideas. It’s ludicrous to think that every single marketing campaign you run will play out as anticipated, and trying to make sure that it does will make you waste a LOT of time deliberating over umpteen choices only to end up at the same result. I would encourage you to boldly test new strategies on a regular basis such as new marketing concepts, price points, guarantees, marketing messages, offers, service packages, closing techniques, etc. That’s HEALTHY, and yes, sometimes you’ll end up with a goose egg. That’s okay. If you’re not coming up blank every once and again you’re not trying hard enough or moving forward with enough new ideas. Nothing, and I mean NOTHING is 100% guaranteed in business. If you constantly try to play it safe and only roll out the campaigns you’re absolutely certain you’ll win will cause you to get very little done, procrastinating and losing in the long run while more aggressive entrepreneurs eat you for lunch and pass you on the business battlefield like you’re standing still.
Until next time…