A few months back…Ace marketer Malcolm Auld published a post titled…
“Your Marketing 101 Guide By The Numbers…”
Malcolm is working on a book about B2B Marketing to help address what he sees as a serious issue in the current business world…
“The B2B category has a lot of executives in marketing roles who have no prior marketing qualifications. They have sales, product or technical backgrounds. Some even call themselves social sellers.”
Implied in Malcolm’s post is that many of these individuals are not entirely sure what marketing is all about…
…and end up flailing around somewhat aimlessly.
Although Malcolm’s post is specifically concerned with B2B marketing…
…I think all marketers will find useful what he has to say.
Here are three points that stood out for me…
(1) The (only) two ways of marketing
It may seem a little odd, but many people handed the responsibility for marketing may not realise that there are two…very distinct…approaches to marketing. They are…
1. Mass marketing; and
2. Direct marketing
Just to be clear what we are talking about…
…in Mass Marketing , you communicate with as many people as possible, for the lowest media cost, to position your product or service in the mind of those people. The aim is that these people then consider you when they are in the market to buy.
Direct Marketing…is any marketing communication delivered directly to individuals and where they can respond directly to you. Responses can be measured and there is always an exchange of either data or money.
Now, it is possible to combine these approaches. However, in most cases a clear choice between them is required and this choice will then fundamentally shape the form of the actual marketing campaigns.
(2) The (only) three goals of marketing communications
One of the problems in marketing that results in unproductive activity is that often people are unclear about what it is they are looking to achieve. Any marketing activity should have one of these three goals…
1. Acquire new customers
2. Get customers to spend more money with you more often
3. Get customers to keep spending with you for as long as possible
Keen students of direct response marketing may recognise these three items as the components of the formula to increase sales that is generally attributed to the great Jay Abraham.
So, achieving any of these goals will help increase sales. Anything else is…probably a waste of money.
(3) The numbers that matter for marketing
There are a few key numbers to understand when budgeting your marketing activity:
1. Lifetime value – how much revenue your customer is worth over their lifetime of buying from you
2. Cost per lead – how much you can afford to spend to generate a qualified lead
3. Cost per sale – how much you can afford to spend to generate a sale
4. The advertising allowable – what you can afford to spend to generate a sale at either break-even or a pre-determined profit percentage
It should be clear that unless you know how much a customer is worth, you can’t make an informed decision about how much to spend to generate a qualified lead and to make a sale. This will then determine which media channels you can use, for example.
I recently came across an example of a small business not knowing the numbers. I’ve been reading “Better late Than Never”, the autobiography of Len Goodman.
If you’re not familiar with Len, he’s probably best known as the head judge on the TV shows “Strictly Come Dancing” and “Dancing With the Stars”.
In the book, Len tells of a time in his dance studio business when he was re-launching the business and placed an advertisement in the local paper announcing a new class. Based on previous experience, he was expecting around 40 people to turn up. In the end, there were…4!
“We were devastated. There was also the expense of the advert, which only added to the sense of failure. We were crushed. What we couldn’t know at that moment was just how valuable these four people would be to the business; valuable because both couples came to me for lessons for over 20 years. They paid for that advert a thousand times over.”
To be fair, Len doesn’t claim to be a marketing expert. This particular little story does illustrate how so many small business owners really are in the dark about marketing…
…and how they could be a lot more successful with some proper training.
Lots more in the article…including Malcolm’s thoughts about the “customer journey”…so well worth reading the original in full. Once again, it’s at…