How Effective Is Your Marketing Spend?
A major part of any company’s marketing activity is getting your message out there. There are a number of ways to do this depending on your market place, product/service and target audience but it could include advertising, social media, events (exhibiting or holding your own events), mailers, leaflet distribution – the list goes on!
Many small businesses spend lots of time and money using a number of these methods but how do you know if they are effective?
What Is The Objective?
Before spending anything, decide what you actually want to achieve from the particular activity. This could be generating new sales leads, increasing awareness, attendees booking for your event, launching a new product or service, increased product sales etc. You won’t be able to gauge the success of any campaign until you have done this.
People often say that social media is free. Wrong! Using social media to your best advantage even without paid for advertising will take time – either yours or a member of your staff. This is still a cost to your business so should be taken into account. The lesson here is to make sure you include ALL costs involved when pricing up your chosen activity.
Once you have established the objectives and worked out the cost, you are then in a position to start looking at the effectiveness of your campaign. Then ensure you measure your marketing.
Consider how you are going to value the responses. For sales of your product or service this is easy as you will know exactly how much money has come in as a result. However, for sales leads consider the average value of a sale in your business as well as your conversion rate. For example, if the average value of a sale is £1,000 and you typically close 50% of leads you get, each lead can be valued at £500. In other words, to hit sales figures of £4,000 you will need 8 new sales leads.
Of course, some of the more long term objectives such as increased brand awareness are less tangible so not as easy to measure but processes such as always finding out where people heard about you from can help to ascertain this.
Once you’ve analysed the results of your campaigns, use the information to continue to improve your effectiveness. If you are spending more on your marketing activities than you are getting back in revenue, it is not working. By measuring your marketing you will find this out. Be strong though when measuring your marketing, if your business spends a lot with a company that you know personally let them see what you’re seeing when measuring your marketing as then they can adjust the cost to you or offer some other things to boost it. If there is no return on your investment then you should consider spending the money elsewhere.
Simply, if something is working, continue doing it (or do it better!). If it doesn’t work, stop doing it, work out why it was ineffective and change it or do something different.
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If you are unsure on how to factually measure your marketing speak to us