Tag Archives: metrics

Marketing , , , , , , , Leave a comment

What Do You Spend to Get a New Customer?

by

Do you know how much you spend, on average, to convert a prospect into a paying customer—attracting the prospect’s attention, educating the prospect about your brand, your services and your products, instilling confidence and building trust—and making a sale? Have you tallied up the combined cost per customer of your marketing campaigns, selling expenses, referral programs, customer onboarding and the like and calculated the average amount of the marketing spend that supports the growth of your customer list—and your revenue, as a result? What kind of a return on investment are you getting from your marketing campaigns and sales strategy?

You may not know in the moment your company’s average customer acquisition cost, but it would be a good idea to update it (or figure it out) and keep that number in mind, because your CAC is a metric that reveals an important story about how your business functions. Customer Acquisition Cost is a key performance indicator, although not necessarily in the way many business owners and leaders think. CAC shines a bright light on the performance of company operations and outcomes, including the business model, which is the essential plan for making money. The metric also reveals the effectiveness of your overall marketing strategy, which reflects your marketing acumen and, in the end, can make a credible prediction of your organization’s potential for profitability and expectations for growth and scalability.

CAC is a metric that can be benchmarked against an industry standard and it’s a smart idea to research your industry’s average CAC and use the benchmark number as a guideline. Learning the CAC benchmark for your industry will enable you to identify a reasonable dollar amount for your marketing and sales budgets and help you avoid either overspending or underinvesting on marketing activities—which you rely on to bring paying customers into the business.

Familiarity with the CAC benchmark in your industry also enables you to evaluate your performance as a marketer. For example, if your company’s CAC is significantly higher than industry average, it could indicate problems with your marketing strategies or sales strategies and practices—-you’re spending money but not bringing in enough customers, or not the right customers, to generate a healthy marketing ROI. On the other hand, if your CAC is rather low as compared to the industry benchmark, it suggests that you may be under-funding marketing. If that’s the case, then theoretically you could assume that spending more on marketing would bring in more customers that fit your definition of ideal. In other words, CAC reflects the effectiveness of your marketing practices and can help you set realistic goals, as well as identify where you need to do better.

Calculate CAC by dividing total marketing and sales expenses by the number of new customers you’ve brought to the business within a given period—annually or quarterly, for example. Because many businesses serve more than one customer segment, it will make sense to separately calculate CAC according to customer segments, which could be based on demographic factors and might also involve differences in sales cycle length or competitive landscape. Incidentally, B2B entities typically have a longer sales cycle and tend to have a higher average CAC than B2C companies.

You’ll also want to segment your spend on the marketing channels you use—e.g., email marketing, social media advertising, customer relations management software subscriptions, and/or attending trade shows—and calculate the corresponding CAC figures. But what does understanding CAC really do for you? CAC is about documenting, analyzing and tracking over time the amount you spend on various customer segments, plus your marketing channels and sales strategies, that are used to convert prospects into paying customers.

There is also the matter of a customer’s average lifetime (revenue) value. You already know that a campaign to bring in a new customer costs at least 5x more than what you must do to retain an existing customer. Nevertheless, you may want to calculate the average amount of revenue that will flow to your business over the length of time that a customer does business with your organization. The question is addressed by calculating Customer Lifetime Value, a metric that is foundational to long-term revenue growth. Additionally, CLV factors into CAC, because it determines the return on investment (ROI) of the customers you acquire.

Calculate CLV by multiplying the Average Purchase Value x Purchase Frequency x Average Customer Lifespan. For instance, if you provide subscription services or have customers on a retainer agreement, you can calculate customer lifetime value by multiplying the amount of the subscription or retainer fee by the length of the subscription or retainer contract (purchase frequency) to arrive at CLV for one customer for one year (CLV is typically calculated on a one-year time frame).

Another useful metric is the CLV: CAC ratio, which compares Customer Lifetime Value (CLV) to the Customer Acquisition Cost (CAC). The ratio documents the revenue an average customer brings to your business, as compared to what was spent to acquire that customer. A desirable CLV: CAC ratio should be at least 3:1, meaning that every dollar of marketing spend will result in three dollars of revenue generated by a customer. A ratio less than 3:1 indicates your company’s marketing efforts are producing less than stellar returns, while a ratio far in excess of 3:1 suggests that you could produce more revenue growth with an increased marketing spend.

Make a point to benchmark your CAC against industry averages and to understand what good marketing and sales performance looks like. Here’s how to get started on figuring out your company’s CAC:

  • Define customer acquisition process and goals.

Make a comprehensive assessment of you acquire customers—paid social media ads, organic social media outreach, thought leadership, e.g. public speaking, hosting a podcast, and/or publishing a newsletter, word-of-mouth and referrals? Have you developed an inbound marketing/ sales funnel to capture prospects who search online to find a B2B Freelance professional services provider in your category? Next, decide what represents a realistic customer acquisition goal for your organization—how many active customers can you reasonably expect to have on your roster in a typical year?

  • Segment your CAC by different variables

Consider how to segment your customers, keeping in mind customer demographics and accounting for the marketing channels and options you employ. Get comfortable with the fact that your CAC for certain channels might be higher than your benchmarked industry average, which means that you’re spending more to acquire customers through those channels. By segmenting your CAC, you can identify the best and weakest performers in your marketing and sales strategy and optimize your resource allocation accordingly by dropping certain options and increasing your investment in better performing channels.

  • Document your marketing and sales budget

Once you’ve chosen your CAC segments, you can look at what each of them costs—identify and quantify all costs directly related to acquiring new customers. These may include advertising, content creation, SEO, social media, email marketing, webinars, CRM software and/or buying your way into business association events that allow you to network effectively. You can use tools such as Google analytics, Facebook Pixel, or HubSpot to track and measure the performance of your different channels and campaigns.

  • Select your time period

Decide on the time period for which you will calculate your CAC—quarterly or annually should make sense for your business. You need to match your marketing and sales expenses and your new customers to the same time period for your CAC calculation.

  • Calculate your CAC

To calculate your CAC, divide the total amount of money spent to finance your marketing and sales activities by the number of customers you acquired in a given period, and apply customer segments that reflect demographic groups and the primary marketing channels you use.

  • Research your industry CAC average

To benchmark your CAC, compare your number with the industry averages for your niche, product or service and target market. Because  CAC can vary widely depending on the industry, the business model, the product, the target market, and the marketing channels used. Therefore, it is essential to benchmark your CAC against relevant and reliable sources of data, such as industry averages and competitors.

  • Compare CAC: CLV ratio

CAC alone does not necessarily indicate a revealing story about the health of your business, but the story will be more telling when you look to CLV and learn the average amount of revenue that you generate from a customer over the span of the business relationship. Be sure to follow-up with an examination of the CAC: CLV ratio, which tells you the amount of revenue generated per money spent on marketing and sales functions. A common rule of thumb is that your LTV should be at least three times your CAC. This would indicate that you have a positive ROI from your marketing and sales efforts.

Finally, keep in mind that CAC is not a static metric and remember that it can and will vary when impacted by various factors, such as certain fluctuations in your industry, organic changes in your product or service lifecycle, marketplace changes, especially changes in the competitive landscape or pricing. You will be wise to monitor and analyze your CAC regularly and adjust your marketing and sales strategies accordingly. 

Thanks for reading,

Kim

Image: © Chestnut Hill College, Philadelphia, PA

Survival Strategies , , , , , , , Leave a comment

Freelancers Do the Side Hustle

by

When a local small business owner and acquaintance of mine opened her second venture, a tiny breakfast and lunch place with a retro cool vibe that I love, she soon started “moonlighting” as a dinner service waitress three nights a week at a small artisanal pizza restaurant nearby. She burned the candle at both ends, finishing the waitress shift at midnight and crawling into bed at 1:00 AM, only to wake up at 4:00 AM to make the 45 minute journey to the wholesale restaurant market six days a week, to help her contain food costs and offer menu prices that customers would accept. It was exhausting, but Nicky was determined to pay her share of the debts from the failed first business venture in which she was a partner and also maintain adequate cash-flow in the new one, where she is the principal owner.

About three miles away from Nicky’s restaurant is Anthony’s, another tiny breakfast and lunch place that I love. A few years ago, Anthony told me that his venture’s cash-flow foundation is real estate. Some years ago, Anthony was able to buy the building where his restaurant is housed; upstairs over the restaurant are four apartments that command premium rents for his harbor-facing location.

Cathy, a former client of mine (who, sadly, passed away about three years ago), worked for three or four years as a Lyft driver, to build cash-flow that safeguarded her ability to make the weekly payroll and cover other expenses in her medical billing business (which her children sold). My friend Jackie, a fitness instructor and trainer, launched a boutique gym 20+ years ago, yet she continues to teach classes at a large, prestigious gym where she receives training and certifications in new exercise techniques that she passes along to her gym’s fitness staff so that her team has updated skills. Jackie is also able to now and again observe smart business practices used by her mega-gym employer that she can apply at her operation to improve her performance as fitness center owner and manager. Then there’s my friend Paul who once co-owned four outlets of a popular skin care franchise. To provide health insurance for himself, his wife and their four children, for many years Paul worked 20 hours/week as a FedEx delivery driver.

I also created a side hustle strategy to protect my business cash-flow. Until about three years ago, I periodically taught noncredit skills development workshops to aspiring entrepreneurs—business plan writing, sales skills training, marketing and networking skills—at a local school and at a business incubator that serves aspiring female entreprenurs. Unfortunately, pandemic related shake-ups torpedoed my access to both teaching positions but if an invitation is made, I’ll gladly return—and money is not my only motivation—I enjoy teaching! On the plus side, since 2016, I’ve been a contributing writer at Lioness Magazine, a globally distributed publication that’s targeted to female entrepreneurs.

So where are we going with this? You noticed that the recurring theme of these stories is how Freelancers and small business owners take action to strengthen their business cash-flow. Freelancers and small business owners can be dangerously vulnerable when it comes to financial security. Keeping an entity healthy throughout the inevitable ups and downs of the local or national economy or, in the B2B sector, protecting yourself from cash-flow crunches that can result if a client is late paying your invoice or worse, doesn’t pay at all, is an essential function of your risk management strategy.

The phenomenon once known as “moonlighting,” that is, working in a second (or third, or even fourth) job, and now called a side hustle, burst into the public discourse during the pandemic, when the economy as we knew it suddenly turned upside down and most jobs tumbled into a confusing transition. The shutdown resulted in the swift closure of numerous restaurants and fitness centers and was soon followed by waves of lay-offs and bankruptcies that are ongoing, especially in the tech and retail industries.

Life gradually returned to what’s called “the new normal” and markets rebounded and stabilized, on paper anyway. Contrary to the many glowing reports of a low unemployment rate, subsiding inflation and millions of jobs that are unfilled (and, allegedly, looking to hire qualified candidates), many Americans are experiencing a different reality and the desirability of earning extra income has taken hold. The popularity of the side hustle economy has continued to grow, publicized by rideshare giants Lyft and Uber and fueled by financial pressures felt by both independently and traditionally employed workers.

Recent data confirms that side hustles are on the rise and here to stay, with CBS News reporting that nearly half of America’s workforce has a secondary source of income or their own side hustles. Surprisingly, according to Side Hustle Nation, side hustles aren’t exclusively for the financially challenged—the 2024 Side Hustle nation survey found that more than 40% of participants have household incomes that exceed $100,000 and 78.4% stated that they aren’t struggling to make ends meet.

The changing societal zeitgeist gives today’s Freelancers and SMBs the greenlight to radically reframe their feelings and expectations toward “moonlighting,” with its former connotations of operating in secrecy in order to rustle up money needed to supplement an insufficient income, to a potentially impactful revenue stream that could surpass mere cash-flow support and extend into financing new business ventures or other investment. For today’s Freelance professionals and SMB owners, a side hustle can translate into a unique growth opportunity but to make the strategy work, the side hustle must be managed with intention. Proper structure, planning and assessment are required. If you are Freelance professional or SMB owner considering the enhanced security that can be provided by a good side hustle, here are six steps to take to help make your side hustle worth your time and effort.

  1. What’s in it for you? As you’ve seen, the side hustle economy gets lots of publicity and the noise may get you thinking—is there an opportunity for you? Life continues to get more expensive and also, extra money is an essential resource when one has financial or entrepreneurial goals. You might see a side hustle as a vehicle to pay off debt, finance your retirement, or build capital to launch a start-up. Then again, you could be motivated by a basic need or desire to supplement your Freelance or other business revenue or your W-2 paycheck. There are also those who harbor the goal of building out a promising side hustle that will become a full-time business venture and replace their current employment. Before you focus on what might be your most promising side hustle, however, you would be wise to clearly define your motivation.

2. What are your marketable skills and are they expert-level? Once you’ve made an uncensored examination of your interest in launching a side hustle, make an accounting of your potentially marketable skills and evaluate what customers might be inclined to pay you to do. For example, might your knack for graphic design open doors to projects such as designing wedding invitations, or perhaps creating marketing and sales materials? Talented writers might parlay that competence into a Freelance editing side hustle. If you were born with a green thumb and can keep blooms popping, from crocuses in early spring to chrysanthemums in late autumn, then window box and garden management may be the side hustle for you. Be aware as well that it’s a valuable competitive advantage to invest in your side hustle skill with training that upgrades your expertise. Certifications, degrees and experience (communicated by customer reviews) can be posted on your website and social media accounts to increase the confidence that prospects have for you. Skills training helps you stand out against competitors and can increase customer demand, grow your client list, justify premium pricing for your services and ultimately, position your side hustle to earn more money, faster.

3. What will success look like? It’s important to align your side hustle’s driving purpose with your marketable skills that a critical mass of customers will pay to receive and also fit your definition of financial success. This is about managing expectations—will the side hustle you have the skill set to get paid for earn you enough money to make it worthwhile doing? For example, you may want to become a piano teacher but research of the most respected teaching qualifications, or your access to potential students, may not support either the price you’d like to charge for lessons or the billable hours you’re likely to get. You may be able to tap a new market and improve access to students—maybe retired adults who want to revisit their childhood piano lessons?—but since you can’t charge your preferred price for lessons because you lack a certain qualification, so you’ll have to work harder and give more lessons. Basically, you must be honest about how much time and focus you care to devote to your side hustle venture and define your picture of success.

4. How disciplined are you? The side hustle will not get off the ground and fulfill expectations if you can’t make yourself put in the time and effort to make it successful. This seems obvious, but for some it may not be as easy as it seems. Before you invest significant money into developing your side hustle consider likely the time commitment, along with the necessary tools, equipment, relationships, training and administrative duties (marketing and bookkeeping, for example) it will take to launch and operate your venture and guide it toward your definition of success. Estimate the number of hours per week, with a realistic hourly service rate, it will take to make the thing worthwhile. Be brutally honest about the number of hours per week or month you can (or will) allocate to working a side hustle. BTW, as you calculate your estimated time commitment, do not even think about infringing on the time and focus needed to effectively do your day job.

5. Create milestones with timeline and success metrics. Operating a side hustle means lengthening your to-do list and spreading yourself thin, making it essential to be organized. Keep yourself on track and also alert yourself to what is or isn’t working by creating a simple and revealing tool—a timeline. At periodic intervals—monthly or quarterly will be good—over a 12 month period, it will be very helpful to track and assess Key Performance Indicators that demonstrate side hustle growth, or lack thereof. Look at billable hours worked, number of customers seen, revenue generated and business expenses to get the story of side hustle performance. Pay attention to prospects who don’t work with you to learn of some element you may want to adjust. It’s important to use a timeline to project what you think is achievable so that, as an entrepreneur, you are setting yourself up for success.

6. Course correct when necessary. You’ll quickly know if something is not performing as you’d hoped (like revenue generated), but the above-mentioned timeline will confirm the diagnosis with metrics. Along with defining your KPI timeline is to recognize what’s working and what’s not, so you can make corrections where necessary. The big-picture view is a revealing perspective. Take the time to consider why those who tell you no are declining to work with you—are you falling short somewhere? On the plus side, are existing customers referring new customers and/or writing good online reviews? Once a month or so, hunt for time in your very busy schedule to think about your side hustle for a couple of hours, just as you think about your Freelance consultancy or SMB. Know that it’s okay to periodically reevaluate and change course if necessary.

Thanks for reading,

Kim

Image: © Shutterstock. Working as a fitness instructor or trainer has been a popular side hustle since the 1980s.

Business Strategy , , , Leave a comment

Fix the Flaws in Your Tactical Plan

by

Look at it this way—if every time you and your team develop goals for your organization all of the goals are achieved every time, take it as a sign that you should be more ambitious. Goals should challenge! Working toward goals should test you and make you grow.

But if the opposite happens and it becomes clear that your strategies and actions are not moving you toward success, you’ll need to stop and discuss. You must understand why things aren’t happening and decide what you can do about it. For sure, a change will have to be made, but how might you figure out what to change?

Today we’ll break down the elements of working toward goals — the actions taken, the strategies, which are pathways, and finally, the goals themselves. Our objective is to recognize what part of the plan is fatal and what is fixable. Spoiler alert–everything is connected. Each component of your plan must support, and be supported by, the other components.

Actions and strategy

It makes sense to start by examining actions—closer to ground level. Every action you or your team takes should be devised to align with and support a specific strategy. All actions should have a purpose that is readily identifiable as a cog in the wheel that carries out a strategy. So if the wheel stops turning, it will not be too difficult to pinpoint the problem and make whatever necessary adjustments.

You may also benefit from rethinking the metrics used to monitor the efficacy and progress of the actions. Are you tracking and measuring the right data? Does the data provide an accurate picture of how your action items contribute to reaching the goal? If not, reevaluate and substitute more meaningful metrics.

Strategies and customer priorities

What matters most is that customer preferences and priorities are tied to and reflected in your strategies. If you’ve analyzed your team’s performance and your actions are on target as regards the plan, then the problem may well lie in the strategy, the wrong path. Perhaps it’s no longer viable?

Or maybe you’ve overlooked other data that indicate customer needs and interests are evolving? If that’s the case, you’ll need to update to ensure that your strategies align with what matters most to customers. You may not need to revise your goals but rather, revise strategies.

Verify the alignment, or lack thereof, between your tactics and strategies. Remember that your actionable tasks are designed to further a certain strategy. It is therefore essential to confirm that you’re using the right tactics to impact the strategy.

SMART Goals

If you’ve taken a cold, hard look at both the strategic and the tactical plans without pinpointing an opportunity for making a timely and productive shift, then it’s time to reconsider your choice of goals.

The problem with your goal may be situational — i.e., what was a valid, realistic goal has lost its luster. The world has turned and now you need to play catch-up and align with the current environment and market. Or it could be that there’s nothing wrong with the goal itself; you just haven’t fully identified, defined and fleshed it out. Reality test your goals by asking yourself the following questions:

SPECIFIC: Specific means “Show a revenue increase of $X and growth in profit of Y% by the end of the current fiscal year,” and not “show an increase in revenue and growth by the end of the fiscal year.”

MEASURABLE: What are the metrics you’ll use to document your progress (and why are they relevant)?

ACHIEVABLE: Is your goal attainable and realistic both in the absolute sense and within the resources—-time, expertise, money—-you can devote to its achievement?

RELEVANT: Does your goal make sense? Does it align with your values and mission of your organization? Does it get your company closer to where you want it to be, in market penetration, referrals and repeat business, revenue earned, or profits made?

TIMELY: Is the time right to pursue and benefit from the attainment of this goal? Also, do you have a clear starting point and metrics targets or deadline date to assess the final result of your initiative?

Thanks for reading,

Kim

Image: ©Winslow Townson, Associated Press. New England Patriots quarterback Tom Brady in the huddle at the December 17, 2017 game against the Steelers at Heinz Field in Pittsburgh, PA

Marketing , , , Leave a comment

Analytics Data: Your Content Marketing Navigator

by

So, how are you doing with content marketing? Are you seeing the hoped- for results? Do you have it clear in your mind the reasons for launching whatever content marketing activity you do—blog? podcast? behind-the-scenes videos of your team in action?—-beyond some half-formed idea about how everybody’s doing it, it’s probably good for business, so get busy? I don’t want to be judge-y but if that is your reality, I encourage you to tighten up your game.

Whatever content marketing you’re into, it will all go down much better when you think about it in big picture mode. Content marketing starts with figuring out the purpose, what you want it to do, the end result you’d like to achieve. We know it’s about creating business, but you’ll help yourself by being more specific and thinking about how content marketing works.

Content marketing is premised on the soft sell approach, expressed by educating prospective clients about the performance, quality, cost-effectiveness and user-friendliness of your products and services. Supporting that primary message, you may also use this style of marketing to communicate the expertise of you and your team and portray your company as dependable and trustworthy. You might also send out the message that you are socially responsible, practice environmental sustainability (“green”) and believe in Diversity, Equity and Inclusion.

If you are put off or intimidated by the very thought of thinking this stuff through, I’ve given you a cheat sheet, shown below. Oh, and remember to invite website and social media visitors to dip into your marketing content by writing a good Call-to-Action that entices them to take a chance—do the survey, download the case study, join the webinar, opt-in and get the newsletter.

But the moral of this story is that you are advised to follow, weekly or monthly, certain key metrics that document how prospects interact with or respond to your content. That reported data becomes your recipe and roadmap for content marketing that works. The data also shows you what doesn’t work, by reporting lackluster numbers.

Follow the open rates, shares and likes of your blog or newsletter and discover which topics mean the most to your readers. You’ll also realize the topics readers don’t love, when your open rate tanks. Data is the navigator for your content. Follow it and find the road to achieving your content marketing and sales goals. Explore free and paid data analytics services and register your website and social media accounts to get started: https://bloggingwizard.com/social-media-analytics-and-reporting-tools/

Common content marketing goals:

  • LeadGen—bring potential buyers to your website and social media accounts, from new or established markets
  • Increasing Google EAT ranking—Expertise, Authoritativeness, Trustworthiness
  • Brand loyalty—-enhance company reputation, build trust, signal dependability, to know you is to love you

Track metrics that matter:

  • Lead metrics—how many leads does your content generate through email opt-ins, call-to-action appeals, or blog and newsletter subscribers?
  • User metrics—how many page views does your content draw? How many downloads, visits, shares and likes does your content receive? Which content format and topics get the most positive responses from readers and viewers, as indicated by high open rates?
  • Sales metrics—how many of the leads that you generate from your content become paying customers? What is your sales conversion rate?
  • Time metrics—how long do viewers spend engaging with your content, where do they stay longest and which pages do they visit?

Thanks for reading,

Kim

Image: Crunching the numbers that guided decisions made by the Oakland Athletics baseball team and resulted in big wins. The story was told in Moneyball (2011, directed by Bennett Miller) starring Brad Pitt (l) and Jonah Hill.

Marketing , , Leave a comment

Finally Figuring Out Social Media

by

Consider, if you will, that you are using all of your company’s social media platforms like a naïve amateur, no matter how long you’ve been active on Facebook or how quickly you jumped onto Twitter and Instagram.  Chances are you do not have a realistic definition of social media marketing campaign success.  You cannot demonstrate meaningful ROI for the strategies you’ve employed.

The fact of the matter is, you are using the wrong measurements to document social media marketing campaign success.  You have been misled and you are confused.  Followers, shares, comments and likes are widely considered the gold standard social media metrics, but does that “engagement” correlate with or generate sales revenue and referrals? Let’s lift the curtain and sort this out.

It’s time to think about social media marketing in the way you do traditional marketing campaigns, including advertising and sales strategies, and apply the same expectations.  Social media campaigns are marketing campaigns, too, and not a stand-alone entity.  Please shift your social media marketing goals and objectives to what is tangible and measurable and bring real value to your customers and organization.  Various social media platforms can take a credible supporting role in the following marketing goals, for example:

  • Raising brand awareness
  • New product or service launch
  • Lead generation
  • Increasing sales
  • Special events promotion
  • Facilitating and/or improving customer service
  • Obtaining donations (not-for-profit sector)
  • Recruiting volunteers (not-for-profit sector)

Once you’ve identified your marketing goals, determine which platforms seem most suitable for your message and which will reach the selected target market groups.  Then, select the content—blog, tweeted updates, YouTube videos, Instagram photos, announcements on Facebook, for example—that will most effectively communicate your message and resonate with your target markets.

Be aware that unlike traditional marketing methods, which fly at 30,000 feet, social media outreach is an ongoing conversation and the best way to attract and retain visitors and followers who might convert into your customers and referrers is to get personal.  Use social media to speak directly to your audience.  Answer questions that will help to familiarize them with your products and services and understand their features, advantages and benefits.  Display visual images of your brand and what it stands for. Include audiovisuals that let influencers give testimonials.  Solve problems, deliver timely information.  Be a cool and helpful friend.

To help you schedule and manage the integration of multi-platform social media campaigns and ongoing outreach across various departments in a larger business organization, investigate Buffer and Hootesuite, or other social media management services.

Now, to measure the effectiveness of your campaigns.  On your own, you can record selected Key Performance Indicators that immediately precede your revised social media strategies.  In six months and then again in 12 months, revisit those KPIs.  Additionally, Google Analytics is a useful tool to sort through social media activity on all of your channels and report on engagement that leads to a sale processed on the company website, event registrations, signs-ups to receive your blog or newsletter, not-for-profit organization fundraising donations received and requests for additional product or service information, for example.

When you approach social media marketing campaigns correctly, you can receive lots of actionable information.  But in order to receive information that will make a difference in you company’s bottom line, you need to ask the right questions and apply the right metrics.

Thanks for reading,

Kim

Photograph: Teletype operator (circa 1941-1945) courtesy of the National Archives           Teletype technology allowed typed messages to be transmitted electronically from point to point to a single or multiple recipients, including sent and received messages. The teletypewriter evolved through many upgrades, starting in 1835 and it was adopted by the Federal Aviation Administration in 1938.  Essentially, teletype was early email.

Marketing , , , , Leave a comment

Marketing 2.0: How and Why You Measure Results

by

Marketing is an essential function of every business.   Smart organization leaders understand that continually reaching out to current and potential customers,  with objectives to create loyalty and trust in the company,  its products and its services and building a brand,  are integral to sustaining a healthy enterprise.  Like all business initiatives,  marketing objectives and strategies must be periodically evaluated,  to monitor and measure results and determine how to adjust and optimize the program if results do not meet expectations.  Choose your marketing activities based on your knowledge of customer behavior.

The measurement of marketing results can be broken down according to a method recommended by Joseph Raymond Roy,  a marketing consultant based in Meredith, NH,  who gives us the acronym DATA:

1. Defining,  identify the result your marketing will promote (increasing the number of potential customers)

2. Assessing,  measure the dollar value of your marketing program (look at the number of customers and gross revenue)

3. Tracking,  determine if customers came to your business as a result of your marketing activities (ask new customers how they found you, or all customers in a survey)

4. Adjusting,  if it is obvious,  do more of what produces the desired result and less of what does not produce results.  In other words,  optimize your marketing activities.

Begin the measurement by calculating the amount of money invested in your marketing activities.  Obviously there is also time involved,  which should be taken into account,  but  it is usually difficult to attach an appropriate dollar figure to one’s time.  How much is the time you spend networking worth?  What is the time spent on social media worth,  or producing your monthly newsletter?

You may develop good relationships with potential referral sources,  but it may take 5 months or 5 years to receive a referral.  Speaking engagements and webinars  are easier to evaluate.  A well-respected venue always has value,  whether or not you receive referral business or meet a future client,  because the very act adds value to your curriculum vitae.  Calculate ROI by deducting the value of resources spent on marketing activities from revenues generated by customers who have come to you as a result of marketing activities.

Tracking  (i.e., forward tracking),  the process of building an identifying mechanism into each marketing activity before it is launched,  so that you can measure the results derived.  If you present a webinar,   the registration of participants,  which includes an email address for each listener,  is a most accurate tracking mechanism.  Responding to a product offer with a special code is another excellent tracking device.   The marketer will be able to identify which customer was not only impacted by a certain activity,  but also will know if that person eventually does business with the company.

There are various types of tracking methods,   including Point-of-sale tracking,  conducted when new customers arrive by asking them how they heard about you.  You will also use point-of-sale tracking when you tally up the sales results associated with the purpose of your marketing program,  be it bigger ticket items,  referrals,  or other customer actions.   Reverse tracking  is the process of going through your customer list and documenting how current customers became your customers.

If you write a blog or newsletter,  measure your reach by counting the number of subscribers,  email forwards and followers.  Point-of-sale tracking  will let you know if demonstration of your knowledge and expertise brings customers into the door.

The ROI of PR should be measured in at least two ways:  first,  through Media impressions,  in which the marketer counts how many media outlets wrote a story or made a radio or television announcement in response to a press release that was sent (a follow-up phone call will likely boost the response rate).   Second,  through Content analysis one can evaluate the accuracy of what was broadcast as a result of the press release and the prominence of item placements in the chosen media outlets.

Online data analytics systems  will track all visits to your website,  customized to your needs.  How many potential customers abandon your website and how many follow-up with inquiries or engage by clicking on your newsletter or blog? What is the impact of your social media outlets on your marketing objectives? Here is how you’ll know.

The ultimate marketing metric is the percentage of your customer base that result from marketing activities,  or Marketing Originated Customers.

It may take a service provider 6 – 12 months to have results to measure.  Obtaining a contract from a new or returning client is a longer sales cycle than selling ice cream cones.  Metrics make it possible to know which marketing activities yield the best results and that knowledge will give you the opportunity to optimize your marketing efforts.  You will do more of what works,  perhaps launching an advertising campaign during a particular season or increasing your participation in certain business or professional groups.  Other activities may be diminished or dropped altogether.  Gross sales will give a dollar value ROI to your marketing program when compared to the pre-marketing program value.

Marketing metrics ensure that you receive a solid ROI on your marketing activities.  Appropriately chosen and implemented marketing activities that are tracked and optimized will always pay for themselves.

Thanks for reading,

Kim

 

Marketing , , , Leave a comment

Marketing 2.0 : How and Why You Do It

by

All those with a product or service to sell must institute a marketing program that promotes those products and services to target customers.  Marketing programs consist of strategies and activities that derive from promotional objectives you would like to achieve for your products,  services,  or the company overall.  Advertising;  writing a blog, newsletter, or book;  speaking at business associations;  teaching a subject that showcases your expertise;  making an in-kind donation to a local charity event;  presenting a webinar;  nominating yourself for (and winning!) a business award;  writing a press release to announce to local media that you are presenting a webinar,  have won a business award or published a book;  networking to meet new colleagues or reconnect and build relationships; and presence on social media are examples of activities that carry out your marketing strategies and have the potential to ensure the achievement of marketing objectives.

For most,  the goal of marketing is to increase sales  (that is, revenue)  by increasing awareness and trust in the company and its products and services and in that way increasing the number of its potential customers.  Marketing is a way to fill the sales pipeline,  as is prospecting for potential customers  (wear your sales hat when prospecting,  although prospecting is not quite selling in the same way that marketing is not exactly selling).  Generally,  marketing strategies are created to produce one or more of these results:

1. Awareness,  so that target customer groups will learn of the existence of your company and its products and services.

2. Perception,  so that target customer groups will think of your company and its offerings in a certain way.  This is the core of brand development; trust and confidence are the primary attributes that you must persuade customers to associate with your company and its products and services.  Depending on your business,  other attributes you may want to attach to the brand are luxury,  practicality,  innovativation or quirkiness.  Reputation management and crisis PR are under this heading.

3. Behavior,  so that target customers will be persuaded to take action.  Your objectives may include attracting new customers;  encouraging repeat business from existing customers;  encouraging sales of higher-ticket items or premium services;  or stimulating referrals by persuading customers to recommend your products and services to others.

Because time and money are limited resources for business ventures large and small,  it is a big advantage to know which of your marketing activities works and if possible,  to also know which activities are effective for certain customers.  Further, it is essential to know how many customers come to your business as a result of marketing activities.

To measure the return on investment ROI of your marketing program,  one must venture into the realm of marketing metrics,  from data analytics to Big Data.  Next week,  we will look at simple yet revealing marketing metrics that will evaluate the effectiveness of your marketing and guide your future marketing activities.

Thanks for reading,

Kim