As 2010 draws to a close, it’s time to finalize your marketing plan and budget for 2011. For next year, wouldn’t it be great to save money on your marketing efforts while not reducing their effectiveness?
I’ve found that almost every marketing budget carries some unneeded fat. An easy way to increase profitability is to make cuts where they won’t hurt.
Follow these four steps to cut costs, not effectiveness:
- Make a list of all marketing activities your business undertakes in a year: trade shows, public relations, advertising, sales trips, customer service training, etc.
- Write down how much money you spent on each item in the last year.
- Now write down how much revenue you can attribute to each activity.
- Do more of those activities that made money and less of those that lose money. Usually, this step is harder than it seems because our marketing plans are full of activities that we do from habit or to satisfy certain people in our businesses. But, for instance, if you lost money on trade shows, you shouldn’t keep investing in them, regardless of a perceived loss of reputation or “getting your name out there.”
This four-step process is simple, if you’re able to track the results of your marketing efforts. But do you have difficulty attributing revenue to each item? Here are some tips to track the effectiveness of your marketing channels in the future.
- Unique toll-free numbers. There are services available to provide different toll-free numbers and track the calls you receive from each. Assign a different number to each advertising channel: radio, print and web. For more granularity, assign a different number to each campaign type.
- Website analytics. If you haven’t already, install Google’s free Analytics on your web site. You can track the effectiveness of your pay per click advertising, other sites referring to your site, search terms visitors use to find your site, the geographical location of visitors and more.
- Ask your advertisers. Advertisers should be able to provide results from your campaigns. Ask them about it.
- Coupon codes. For any special offer you provide customers, use a unique coupon code you can use to track redemptions.
- Lead tracking. When you record a new contact, track where the lead came from. Usually people don’t mind being asked, “How did you hear about us?” Store this information on a spreadsheet, contact application or lead manager like salesforce.com.
Some marketing efforts don’t have a clear return on investment, like training your receptionist to help customers find information or encouraging your sales staff to develop better relationships with customers. Fortunately, most efforts that have an unclear ROI also cost the least. And personal interactions have the biggest impact with your customers because customers will remember a phone call with a member of your team more than they will remember an advertisement they saw in the newspaper. When planning your marketing budget for 2011, cut costs, not effectiveness and promote interactions over impressions.
Amanda,
Good stuff. I know many companies are reducing their footprint or eliminating trade shows. I tend to think most trade shows are more expensive than their value, but I struggle to quantify the value.
How much is the perception of “they aren’t here, maybe they are struggling” worth? Do you have any advice or formulas on calculating the indirect value of trade shows?
[Reply]
amanda Reply:
December 10th, 2010 at 11:07 am
Hi Jeremy,
Thanks for bringing up trade shows. In my direct experience, trade shows have always been a waste of time. The ones I’ve attended, even the very large, “important” ones don’t do more than generate so-called “buzz.” It just doesn’t seem smart to me for companies to spend tens of thousands or hundreds of thousands of dollars on possible “buzz” unless they are a very large organization.
Each company is different, though, and a case could be made for an individual company to attend a trade show. That everyone else will be at the trade show is the exact wrong reason, however. If everyone is there, you won’t get noticed without spending a lot of money.
I’ve definitely heard the “If we don’t show up, people will think we are struggling” excuse, but I don’t really buy that. If you decide to spend your trade show budget on different marketing efforts, word will get around about that (if you do it right, anyway).
Here are some ideas for how to reallocate a trade show budget:
-Send a personalized gift to customers and ask for referrals.
-Invest in a marketing database that will allow you to learn and use detailed information about customers and prospects.
-Travel to your best recurring customers to solidify your relationship with them.
-Hold a free seminar or mini-conference for your customers and prospects.
[Reply]
Jeremy Powers Reply:
December 11th, 2010 at 5:07 pm
Thanks Amanda! For most organizations, I would agree with you on this. 9 times out of 10, I expect there is a better ROI from other activities.
I especially like the thought on holding a free seminar or mini-conference.
Merry Christmas!
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