When I first jumped into business, I got really excited about the prospect of having my message being heard by the entire world. I had access to all the latest marketing tools and techniques and I wanted to spend money to test them all. I wanted to get my message out there at any cost.
One of my first big spends was an advertisement in a local emergency services magazine. My thought was that I was supporting the community and that thousands of emergency service personnel would be knocking on my door to pay for my services.
But it didn’t happen like that and back then I had no idea why.
As business owners, we need to make decisions on how best to allocate our cash resources, especially our marketing spend. Trying to decide on the best way to invest our limited funds can be overwhelming and leave you feeling powerless.
But it doesn’t have to be like that. A simple formula can help you make informed decisions in a relaxed state and with a clear mind: “the more information you have, the more likely you will make smart decisions.”
It sounds simple but do we really know how to use this formula?
I’m about to share with you the five principles that multi-million dollar business owners apply when making decisions about their marketing spend – principles that they have taught me and that I have applied in my business.
Principle 1: Know Your Outcome
Whenever you are about to spend money on marketing, write down the result you expect from that spend.
I’ve seen too many business owners blindly pour money into a marketing funnel because they saw a YouTube video that promised them the earth or because their best friend used a technique that worked for their business.
When you know what outcome you are expecting AND when know your target audience, you can start to piece together marketing approaches that work and eliminate approaches that won’t work.
As an example, I run a business that helps Australian Small Businesses understand technology and how to use it to build their business. The majority of this target market use “old school” business tools like a phone and an email address. They shy away from modern technology tools such as LinkedIn or Facebook.
My research has helped me uncover some really powerful ways to market a business on Facebook and Google Plus. As powerful as these systems are, they are completely useless for my business. My marketing budget is better spent on traditional marketing techniques such as face-to-face networking, leaving pamphlets in the local coffee shop or getting on the phone.
Principle 2: Gather as Much Information as Possible
Knowledge is power.
Have a process in place where you, or an admin assist, gathers information on a regular basis, to help you keep track of what’s actually happening with a marketing campaign.
When you have this information, compile it into a report that helps answer these questions:
- How much am I spending on this campaign?
- Is my target market interested in this campaign?
- What’s the cost of a new leads?
- Am I converting the sales?
- What’s the cost of a sale?
- Do I continue with the campaign, adjust it or stop it?
An example of this report is shown below. This report is compiled on a weekly basis, and presented to the owner of the business in a summary form. All he needs to know is what’s working and where should I be spending my money.
Marketing Report 01 FEB – 01 MAY
|FB Advert 1||$1,800||15,187||683||74||$24.32||18||6||33%||$300.00|
Principle 3: Business works in 90 day cycles
Business owners who have transitioned from a corporate 9-5 background tend to fall into the trap of expecting results immediately. They set up a marketing campaign, switch it on, and then expect customers to line up at the door the next with wads of cash for their product or service.
The reality is that the results of a campaign will start to show in around 90 days.
Many business owners “leave the party before it gets started.” It’s the ones that stick around who reap the rewards of their efforts. Put simple, if a campaign is getting a small amount of traction, continue with it and monitor it closely. When the marketing mix is right, then pretty soon it will start to build momentum.
In saying that, if your business is haemorrhaging money on a single campaign that’s getting zero results after a few weeks then it might be wise to call a halt on that campaign.
Principle 4: There’s no failure, only feedback
When was studying to become an NLP Practitioner I learned this powerful principle – “there’s no failure, only feedback”.
When you step back and view the facts about your business, your business will feedback information to you. What do I mean by this? Say for instance that you’ve got a large number of clicks to your internet marketing campaign, but very few people are taking action. This is a strong indicator that the web page that they are clicking on needs to be adjusted to help them take action. Consider factors such as:
- Does it use the language of my target market?
- Does it cut to the core of my target market’s biggest challenge?
- Am I making it easy for them to take action?
With adjustments, this part of the campaign will probably start to make traction. When this occurs, move onto the next step of the marketing funnel. You might soon notice that your business is providing honest feedback right where it hurts – sales conversions. If your sales conversion ratio is less than 30% then it’s time to ask your mentor for help with your sales process. If however you are converting 50% or higher, then you’re on the right track.
Taking the approach that your marketing campaigns never fail, they just provide feedback will help you get your marketing mix right. Applying this principle to every step of your marketing funnel will soon have it running like clockwork.
Principle 5: Have a Third Party Review Your Reports
Now that you’re armed with all the information of your marketing reports, it’s time to share the facts with a third party. This means somebody who’s outside the business and can look at your business objectively.
I’ve seen too many business owners who shy away from building reports, using the excuse of “I don’t have time” or “I don’t know how to.” The reality is that you need to know how your business is performing.
Whenever I run a business I always have a coach or mentor to report to. Not only are they great for bouncing ideas off, they will give you an honest insight into what’s really going on with your business.
In the early days of business my business coach was particularly honest with me. There were a few times where I wanted to knock his lights out but his persistence and honesty have helped me get to where I am today.
Next time you’re about to meet with your coach, have them go through your marketing reports. If they’re worth their weight in gold, they’ll challenge you and help you grown. When you grow, your business automatically grows.
It’s probably a little known fact that eight out of ten business decisions don’t work. You need to get through those eight decisions to find the two that do work.
To help you gain clarity, drop the overwhelm and look at your business objectively invest time and resources into regular reporting. Have your coach give feedback on those reports and be prepared to be flexible with your marketing approach.
Looking back at my first big marketing spend, from a purely business point of view it was a waste of money. The advert was really tiny, I had no idea what my outcome was and I had no idea of how to track whether people were reading the advert. Put simply, it was a blind decision.
It was only after I started to leak money that I started working with business coaches, who taught me the importance of knowing where to spend my marketing money wisely. I was soon accountable to my coach who helped my formulate plans to market my business. Before I knew it, I have new leads coming into my business who wanted my services for a fraction of the cost of what I’d been spending.
Australian-based entrepreneur John Hill is founder of The Web Warriors, a movement that is helping small business owners expand their business with a clever mix of strategy, a positive mind and technology.
John is a thought leader, business mentor and speaker and loves helping people live their passion through business.
John originally founded the Ultimate Life in early 2013 as a movement to help men heal the hurt of broken relationships and attract their dream partner. Since then, his clients have experienced an explosion in their business, prompting John to expand into his passion for business mentoring.
With a corporate background in website development and project management, John soon realised that his training and technology skills can be put to good use to help business owners understand how to use technology to grow.
His specialty is helping coaching and mentoring businesses to get more clients and wow their client’s experience via their website.
In his free time, John spends time with his fiancée and son, keeps fit by participating in endurance sports events and keeps his fingers occupied by playing guitar.