5 Hints to Improve Your Marketing
“How do you get people to move from old ‘F-word’ habits and toward revenue-building promotional behaviors?”
In my last post, The F-Word and Other Derogatory Terms, I argued that businesses have become too accustomed to using the word F-word (free) when it comes to marketing. One of my colleagues commented on that post asking the question above: “How do we change old habits?” As I began to respond to her comment, I realized it was not a short or easy answer. Here are five tips that I believe can help us move beyond the F-word toward revenue-building promotions.
1. Clarify the Goal. Decide what your organization is trying to accomplish with this particular marketing campaign. Is the goal to gain new customers? Is the goal to get existing customers who have not purchased in a while to buy something? Or is the goal to get existing and purchasing customers to buy more? Will giving away free products help you meet your goal?
2. How to Measure. Discuss how your organization will measure if the promotion (sale, coupon, special price) was successful. How will you determine if it encouraged new customers to buy from you? How will you determine that those who took advantage of the promotion were not existing buyers? How will you measure the impact of the promotion? How will you measure that someone who was already purchasing is now purchasing more? How will you determine that giving something away for free initially, generated revenue later? If during this step you determine that your clarified goal cannot be measured, then you need to come up with a new goal.
A goal that cannot be measured is worthless.
3. Plan and Execute. Plan a campaign that falls within the parameters that you have set forth. It must be aimed at fulfilling your clarified goal, and must be measured according to those standards agreed upon. When an adequate campaign has been designed, execute it. During execution, continue to monitor the promotion to ensure that it functions as expected.
4. Measure and Evaluate. If the promotion is not measured, how can success be determined? As previously mentioned, if your clarified goal cannot be measured, decide on a new goal. It is possible that during the process the goal appeared to be measureable, but after execution and evaluation you discover that it really is not measurable in the way you hoped. That’s okay! Learn from the mistake, clarify a new goal, or decide a new way to measure the goal.
5. Repeat or Rethink. If measurement and evaluation show that the promotion was successful (i.e. accomplished the clarified goal) then repeat and even improve it along the way. If it was not successful, stop immediately. Start over from the beginning if you have to. Clarify new goals if necessary or other means of measurement. Perhaps everything went well with one small exception. Correct the exception and try again. Measure it again to see if results improve. Remember that you cannot run the same awful promotion again and again, and hope that results will eventually improve.
Bonus Tip: The One Dollar Rule. If you are looking for a great way to measure your marketing campaign, consider the wisdom of Mark Stevens, author of Your Marketing Sucks. As Stevens explains:
“Ensure that every marketing dollar you spend . . . brings back more than $1 in return.”
Consider that when you give something away for free, you are often starting your measurement in the red with a negative return.
Let me offer a real-life example. I worked with an organization that planned to build sales by increasing the amount of money that customers would spend on each visit. The hope was to improve sales for a specific product. The product was initially promoted through a “Buy-One-Get-One Free” promotion, and it seemed that sales had improved. However, once the promotion expired, customers stopped buying. So this organization took a step back and tried again using the steps mentioned above.
Clarify the Goal. We wanted to increase sales of the product by fifty percent in one year.
How to Measure. We were going to measure the total sales of the product, but also determine growth in sales based solely on the market focus and selling more of the product. This allowed the organization to see what growth was organic, versus what came in from the focused campaign.
Plan and Execute. Some demographic and purchasing research showed that there was one day in the week that sales of the product exceeded the product sales of all other days combined. Initially, the best sales person (a higher paid employee) was assigned to work that day specifically, and given the task of pushing that product. Goals were set for the quantity of products that would be sold each day and small rewards were offered to this employee for meeting daily goals.
Measure and Evaluate. After only six months, sales had increased by almost fifty percent. This boost in sales required the inclusion of an additional worker. Specifically, the extra worker would function as a point person who would ensure the proper ordering and fulfillment of the product once the sale was made.
Repeat or Rethink. After one year, sales had increased by one-hundred seventeen percent—more than double our goal! Clearly successful, the organization set new goals based on what they thought was realistic and feasible for the next year.
The One-Dollar Rule. While additional expenses were incurred on a more expensive worker and additional fulfillment employees, the campaign focused (non-organic) growth was enough to mitigate these costs. Every dollar spent on marketing the product (including the additional labor) brought in approximately six dollars in sales, and the F-word was nowhere in the promotion.
In conclusion, it all starts with defining a clear and measurable goal. To determine if the campaign was successful you must decide what your measurement will be, and continually measure throughout the entire process. If your campaign is successful, look for ways to repeat it and improve it. If it didn’t work, start over and avoid the F-word (free) like the plague.