The internet is filled with experts that give you tips and tricks for improving your small business marketing. Including this one. Experts like me share our experiences to help you find new ways to reach customers, nurture them, drive them to purchase and keep them coming back. While most of this advice is certainly helpful, it can take time to realize the benefits, time many small business don’t have. Instead, try this one change to improve the return on marketing for your small business.
Treat marketing like a real investment
Calculate a return, amortize the spending over time (as an exercise) and drive towards that return.
You probably don’t buy a new POS system, enter into a new property lease or upgrade your website without performing some ROI calculations. Marketing allows you to perform your business and delivers benefits well into the future, so why would you treat the spend any different? Internally at least.
At the very least, require a business case for every new marketing investment to start teaching your small business the discipline to identify the expected return on your marketing activities, and hold it accountable for obtaining them. It will teach you to stay away from shiny new trends that don’t pan out and focus on demand generating activities that consistently deliver hot leads.
To take a step further, but still very simple, look no further than your sales funnel. With digital tools you should be able to identify:-
- How many people become aware of your business every year.
- How many of those people enter the next phase of the funnel.
- How long does it take to nurture these leads until they become sales opportunities and then into paying customers.
If you don’t know, now’s the time to start looking at your analytics and speaking with your sales and marketing teams to help you create a series of testable hypothesis.
After answering these questions reasonably well, you’ll want to run some simple calculations to help you get started. Work backwards. For example, say you want to improve your awareness and you need 1,000 customers with an average sale of $50 to reach your 2016 revenue goals.
You should be able to use the information in your sales funnel exercise to find out how many people you need to reach in an awareness campaign, at the top of your funnel, and how much you should spend there. Knowing how many people you need to reach to get to your revenue goals you’ll be able to compare tactics to identify which investment will deliver the best return. Should you increase your keyword budget, use more targeted keywords or run a series of Facebook ads?
When you treat your marketing spend like an accounting investment, you’ll have an expected return on these activities and it will help you make a better decision that will improve your bottom line.