How will you increase the profitable revenue of your company this year? Are you trying to maximize the revenue from existing customers, or maximize the revenue per order, or you just trying to increase the number of new customers for your product or service? Maybe you’re trying to out-maneuver your competitors and increase market share.
How will you accomplish your goal?
Let’s say that your goal is to increase the number of prospects for your product or service, to either sell more online or to provide increased quality leads to your sales force.
There are myriad ways to accomplish this. Maybe you want to generate more revenue through the Internet, and therefore either build or enhance your website presence. Maybe you want to increase more prospects through public relations or maybe social media. Or maybe you want to increase the number of resellers for your product by adding affiliate marketers.
Choosing the best strategy
The attributes of your product, your marketplace and your competition will help you prioritize what could give you the best ROI. Highly complicated or expensive products often require a personal sales touch, so are often not an ideal choice to try and sell online. However, the Internet can help generate qualified sales leads and deliver more prospects for your salespeople to turn into customers. Press releases within your industry, or referrals from existing customers via social media, might also be helpful.
On the other hand, products that can be easily understood or have many competitors might do very well online. An enhanced website that is optimized for the search engines, or an online advertising campaign, might give the best ROI here.
Choosing the best marketing techniques
Let’s say that your goal is to close more business on your website. To do so, you either have to drive more prospects (i.e. traffic) to your website or convert more of your prospects to customers (i.e. conversions). Ideally, you should test both, because it may be more cost-effective to improve your conversion rate then increase the traffic to your site.
You could easily drive more traffic to your website through search engine advertisement, so when a prospect is searching for a product like yours on the Internet, they will see your advertisement. If they click on your advertisement, you could take them to a specialized page on your website, called a landing page, where you would try to convince them to purchase your product. You could easily measure this activity with the help of Google Adwords and Google Analytics, for example, and determine your marketing cost per lead and per customer and per dollar of new revenue.
Refining your technique
Should you spend more money on advertising to drive more traffic to your website, or, should you spend more money on increasing your conversion rate? By focusing on conversion rate, you could have more prospects click on your ad, and Google will reward you with higher quality ads with lower cost per click rates. That translates to more prospects per marketing dollar spent. You could also have more visitors to your website click on your purchase button and become a customer. That translates to more customers per marketing dollar spent.
To figure out which approach has better ROI, you could easily set up some split tests where you send half the prospects to “version 1” and the other prospects to “version 2”. In Google Adwords or Bing Adcenter you can create alternative ads and the search engines will automatically redirect traffic to the best converting ad. To improve conversions of prospects to customers, you could create a second landing page for the ads, with each page having a different approach to trying to get your prospects to purchase.
Rinse and repeat
Now you have everything you need to know to figure out where you would spend more money, increased advertising or better conversion. If the overall cost of getting a $10,000 of revenue before the conversion optimization was $2000, and the overall cost of getting $10,000 of revenue after doing some optimization was only $1500, then it’s worthwhile to do another round of optimization.
At the point where you reach diminishing returns on time and dollar invested, then it’s time to focus on finding a different marketing technique that could have more cost effective for your business.
Marketing, in the end, is both an art and a science. With the knowledge of your marketplace, you need to figure out which marketing services will give you the best chance of increasing profitable revenue. But in the end, it is only your best educated guess. You must measure the results to determine if it’s cost effective. More importantly, you need figure out which marketing services are the most cost effective and deliver the best ROI for your business; increase your marketing spend on the ones that the most cost effective and reduce your marketing spend on the ones that are not.
Whether you are a novice or sophisticated marketer, marketing is a process. With a lot of thoughtful analysis, you will be able to decide which types of marketing services best fit your company’s objective. However, only through measurement, and a bit of trial and error, will you be able to maximize the ROI from your marketing investment.
Marketing Outfield gives you an easy way to outsource your marketing needs to a specialist and buy fixed-priced marketing services from independent service provider. As in the example above, with the addition of a simple landing page and some advertising, you could find out how effective that approach would be for your company. If it was effective, you could dramatically increase your marketing spend in this area with high confidence it would drive profitable revenue, and maybe end up hiring an in-house marketing specialist to do it or outsource the activity to a full time contractor or agency. If it was not effective, you could try another approach, like search engine optimization, for example. By purchasing fixed-price services your marketing budget goes further and you better understand how to drive profitable revenue cost-effectively. This could give you a strategic advantage over your competition, who probably thinks that marketing is an art form that they cannot afford. Marketing is a process that any smart business person can leverage.