Or are you making a big mistake?
As a small business owner, you need to be sure you are using your marketing budget effectively; that your marketing is helping you to hit your business goals. To ensure this is happening you need to review, to measure, your marketing regularly. The question is: what are you looking at?
Inspired by a recent LinkedIn post from one of our specialist partners, this article looks at a common mistake many small business owners make, and what you can do to get a more accurate view of what is really working.
The big mistake
Since SME Needs started in 2011, we have seen lots of people make this mistake. When they review their marketing and sales performance, they consider only the big numbers:
- How much did they spend on marketing this year?
- How much new business was generated?
Whilst this will give you an ROI figure, it is not particularly useful.
Why look?
Put simply, you measure your marketing to see how it delivered for your business. But when done properly this measurement exercise gives you far more – where there are opportunities to improve your ROI.
You will never have the perfect marketing plan
In a perfect world your marketing will all work, delivering a great ROI from every marketing channel you use. Unfortunately the world is not perfect. At this point, don’t worry, because every company in the world, from the smallest to the largest, is in the same situation.
Measuring your marketing properly shows you what is working well, what is working okay and what is not working. This allows you make decisions that will improve your marketing results next year…
- Do at least the same, and possibly more of what is working well.
- Work to improve the results from what was okay
- Stop, or fix, what didn’t work.
Look Deeper
To get the information you need to adapt your marketing, you need to look at the detail. For every marketing channel you use, what happened?
- How much did you spend?
- What was your ROI, and how did that compare against your target for that channel?
Remember that your marketing activity does different things. Some will be about maintaining or increasing brand awareness, keeping your network up to date with what you are doing. Some of your marketing will be internal, strengthening the company culture and some will be about developing new business.
What is needed?
Spend
The first piece of data you need is spend. What did you spend on marketing, by channel? Assuming you’re using Xero, or something similar, identifying what you are spending should be easy.
Lead Source
Lead source is often the trickier data set to gather. The main reason for this is the information not being collected and/or recorded. If your sales process starts when someone completes a contact form and calls you, do you ask them how they found you? If you haven’t got a digital way of collecting this data, how will you know if you don’t ask?
At this point we often get people mentioning attribution. It is highly likely that your prospects have interacted with your brand in multiple ways – emails, social media, heard a radio advert, and so on. How do you know what made them pick up the phone?
Amazon defines marketing attribution as the way businesses determine how marketing tactics—and subsequent customer interactions—contributed to sales, conversions, or other goals. These marketing metrics are used to identify the channels and messages that inspire potential buyers to take action. A pretty good definition.
Our advice – keep it simple – ask them. They are going to tell you the marketing channel that, in their minds, had the most impact. Until you’re getting 1000s of leads, there is no need to make it more complicated.
Poorly defined lead sources
When looking to define your lead sources, think carefully. You need to match your lead source to your marketing spend. Let’s give you an example…
If you say a lead source is your website and you actively so both SEO and PPC marketing, how do you know which channel to attribute that lead to?
If you use an event as a lead source and you’re using email marketing, social media and PPC to get people to register for an event, which one got them to the event?
Before this wanders off to another topic, let’s get back on track….
Where are the numbers slipping?
Once you know the ROI from each marketing channel, you can start work on improving performance.
Where you’re getting a good ROI, don’t worry too much about this bit – just remember you can always get better results.
By looking at the numbers through your pipeline, you can identify where the problem is. Let us explain.
Where the statistics drop, that is where the problem is!
| Marketing & Sales Stages | Where the issue is |
| Not getting traffic to your website or social media | Marketing is a problem and needs reviewing |
| Not getting any leads | |
| Not getting many quality leads | Most likely a Sales/Marketing communication issue |
| Not converting leads into sales | Sales is the problem |
| Not keeping your clients | Operations is the issue |
Assuming you have something like Google Analytics and your CRM is being completed accurately (!), you have all the data you need to see where the problem is.
How often should this be done?
This is not a quick exercise so we recommend at least once a year. The more you spend on marketing, as a percentage of revenue, the more important it is to know what marketing is and isn’t working.
Need a hand? If you’re not comfortable doing this, or simply want an independent opinion, get in touch and we’ll be happy to talk more about your marketing performance.
