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How to generate a great Marketing ROI

By Marketing Performance

growing your investment image to support article about getting a great marketing roi

What is a good Marketing ROI?

All small businesses should invest in marketing. Consistently delivered marketing will enhance your brand, build your reputation and drive new business. At this point, the two questions we get asked are:

  1. How much should a small business spend on marketing? See our thoughts on this here.
  2. What is a good marketing ROI?

What is ROI

ROI stands for return on investment. You want all your investments to increase in value. You put money into ISAs and your pension to save for the future and you pay professional investors to grow that investment for you. It is the same with your marketing investment.
The marketing ROI calculation is: (Marketing revenue – marketing cost)/marketing cost.
Usually displayed as a multiple (X:1) or a percentage, your return on investment (ROI) show how much you get back. If your marketing generated exactly the same return as you spent, your marketing ROI would be shown as 1:1, or 100%. Clearly you want more back, but what should you expect and over what timescale? What is a good marketing ROI?

A great marketing ROI

Neilson research is often quoted as saying the average ROI from marketing is just 1.09:1. However, this is data from 2009! A good marketing ROI is 5:1, or 500%. For every £1 you spend on marketing, you get £5 back, after the cost of the marketing is taken off. A 10:1 ROI is considered exceptional, based on a range of articles published on the topic.
These figures are based on revenue and not profit, so you need to ensure that you take your gross profit margins into consideration when reviewing your marketing performance. If your gross margin is 100% (Cost of Goods Sold (COGS) is 50% of sale price), your marketing ROI needs to be at least 2:1 to make it worthwhile.

When should you measure your marketing ROI?

There is a tendency to measure the marketing ROI too early, as management look to get back the investment quickly, but you do need to measure, so when is the right time? We had a client who, a month after a trade show, moaned that the ROI from the event wasn’t good.  However, when they looked back again 12 months later, the directly attributable revenue was over £100,000! To work out when you should measure the ROI, the biggest factor to consider is your average lead time – how long does it usually take for a lead to turn into a sale? If it usually takes six months for a lead to convert, there is absolutely no point in measuring the ROI of that campaign anytime before then.

Lifetime value

Each new client your marketing generates can spend with you just once, or for many years to come.  The revenue generated from these clients needs to continue to be taken into consideration when you calculate your marketing ROI. We ran PPC campaigns for 5 years for a client. Initially the budget was just £10 a day, but over time that increased as the revenue generated continued to flow. The spend in the first year was about £3K, generating about £30K first year spend. Over the next 4 years, the total PPC spend added up to £129K, but the revenue generated from those clients was £4.3milllion – a 33:1 ROI!

How to generate a great marketing ROI

The numbers will tell you.  Once you have measured the ROI from each individual marketing channel you are using, you:

  1. Immediately stop any with a negative ROI
  2. Move your marketing investment to those channels that produce the highest marketing ROI

Picture this:
You’re currently using three marketing channels:

  1. Print advertising, generating a 3:1 ROI from £15K annual spend
  2. Pay per click Ads, generating 4:1 From £10K
  3. Search Engine Optimisation, producing a 2:1 ROI from £12K

You generate a total of £146K; a marketing ROI of 2.94: 1.

If you redirect the SEO spend evenly across the other two, assuming the ROI is maintained, you will increase sales to £164K, an ROI of 3.43:1.

If you had diverted all the SEO spend to PPC, revenues would have increased to £170K or a 3.6:1 ROI. Diverting all your marketing budget to PPC could generate £185K, but single channel marketing campaigns rarely produce an ROI that is better than an multi-channel approach.

The other factor that does need to be considered is other marketing channels. Are there other marketing channels that could produce a better marketing ROI? You’ll never really know until you try them, but we recommend you take advice before simply diving in.

We have a marketing ROI calculator you are welcome to download and, of course, if you would like to discuss your current marketing performance and how to generate a great marketing ROI, get in touch.

We hope this helps.

If you would like to discuss your marketing budgets and plans, give us a call and let’s talk.

Tel: 020 8634 5911

image of man pondering about how to market to his current clients

Why and how to market to your current clients

By A Helping Hand, Marketing Performance

image of man pondering about how to market to his current clientsWhen you win your next new client, will you stop marketing to them, or will you continue?  I talk to lots of small business owners who, once  the sales process starts, they stop all marketing to a prospect. They also never actually market to their clients. That is a big mistake – let’s explain why. Here’s our guide to why and how to market to your current clients

6 reasons why you need to market to your clients

1. They already know and trust you

Your clients have been through the sales process. You developed a relationship and they signed on the dotted line, so you know them and they know you. Whilst you will have some relatively new clients, many have used your products, or services, for a long time, so they trust you to deliver. As they say – a bird in the hand…

2. You already have the right contact details

Just a small point, but you know how difficult it is to get the name of the right decision maker, and their contact details. That is often half the battle.

3. They know how good your products are

They have experienced your products and your service levels for some time now. Assuming they are happy, why would you not be marketing to them?

4. They can buy more

How many of your clients buy every product or service, that they can, from you? At a guess, it’s is 0%. The more they are buying from you, the stickier the relationship and the harder it is for them to leave (although you will be delivering a great service, so they won’t want to). As they know and trust you, the sales process should be much faster.

5. They may not know you sell it

The biggest reason that companies don’t buy more from their suppliers is that they don’t know they sell other products and services.
Just because you have sold your client something, it doesn’t mean they have a full knowledge of your portfolio of products/services. Just because you know your full range, don’t assume they do.

6. They can refer you

For most small businesses, the best leads are referrals. The best people to refer you are those who know you, trust you and have used your products and services. When they are talking to their peers and the topic of conversation changes to what you do, they can easily suggest “you should use the company we use” to others. But only if you ask them to…

How to market to your current clients

There are two distinct pieces of marketing you should be doing to your clients:

  1. “Keeping them up to date with what you are doing” marketing.
  2. Promoting other products marketing.

Let’s look at these individually

Keeping your current clients up to date

This type of marketing communications does two things:

  1. Maintains the non-financial relationship and further develops their trust in you and your business.
  2. Provides them with more information for when they consider referring you to others.

It is less focused than the product promotion marketing and it isn’t designed to specifically generate leads, but it does improve awareness and it does increase your reach and potential target audience.

Newsletters

Newsletters are a great way to keep people up to date. Email marketing tools, such as Mailchimp, make it very easy to do. Test whether people prefer a long version (all you want to say in the newsletter) or a short version, with links to where they can find out more.
Seriously consider doing more than one version of the newsletter, with little tweaks for each group. For one of our clients (a membership organisation), we do three versions:

  1. For current members
  2. For lapsed members
  3. For non-members who are on their mailing list

All three contain core information, with latter versions containing more about the value of being a member.

Social Media

Are you following your current clients on LinkedIn and Twitter? Build a list in Twitter and then follow on LinkedIn so you can see what their outbound priorities are. Are they looking for new staff? Are they making a lot more noise? These could be signs of change within the business that you can take advantage of. If you’re an IT company, do you need to talk to them about Microsoft licenses? If you sell furniture, do they need more desks and chairs?

By following them, you increase the chances of them returning the favour too. If they are following you and you are posting useful content, there’s a good chance they will share and comment. This increased your reach by putting you in front of their network too.

Talking to them

Whilst strictly an account manager function, it is still marketing (not all marketing has to be done by the marketing team). You are building the relationship and ensuring you are front of mind, even when they aren’t actively buying from you.

Promoting other products

Have you worked out what your clients have and haven’t bought from you? In our experience very few companies have any clients who buy everything they offer, but if they know, like and trust you enough to buy at least one product from you, why can they not buy more? A simple spreadsheet can quickly show you which clients are buying what services. Exclude any competing products or services (e.g. IT support companies cannot sell local server support and hosted server support at the same time) and then you have a list of all the clients who could buy each individual service.

Account Managers working with Marketing

Once you have your list, marketing can develop omni-channel campaigns around each product or service; maybe one per month or per quarter. Working alongside your account managers, you quickly have a multi-pronged approach to selling more products into your current clients

Sharing case studies

For clients who aren’t using a particular product, share case studies with them from clients who are benefiting from that product, particularly if they are in similar sectors. Clearly showing both the issues your product solves and the results you deliver make case studies very powerful.

Special offers

Making it easy for people to buy, using offers, really helps. Depending on what you are selling, this can range from introductory prices to extra time/quantities and all the different versions you can think of.

2 + 2 = 5

Sounds obvious, but it isn’t done very often. Combining other products or services with what your client is already buying from you can deliver enhanced benefits for your client, so make sure they know about this. You have to give them a reason to buy the additional products.

Selling more to your clients is a great way to increase sales quickly and, relatively, easily. Don’t make the mistake of stopping marketing either when the first sales process starts or when it ends. Marketing to your clients should never stop and we hope our guide on how to market to your current clients has explained why.

Of course, if you would like a hand with this, give us a call…

Let's talk about improving how you market your business to your current clients, as well as new ones. Give us a call.

Tel: 020 8634 5911

what does your brand mean to your target audience

What does your brand mean to your target audience?

By A Helping Hand, Small Business Marketing

What does your brand mean to your target audience?

This is the second part of our ‘Activate Fierce Brand Loyalty’ blog post series. The first of which helps your brand to develop an awareness with your target audience.

This blog post follows on from the development of building awareness through your client asking,

“What are you?”

what does your brand mean to your target audience

How can you differentiate yourself from your competition?

The concept of brand development is to be able to differentiate yourself from your competition. One of the pitfalls small businesses may fall into is focusing on promoting their service or product only. Your competition will be doing the exact same thing.

This becomes confusing for your potential client who is hearing the same thing from multiple businesses. Whether that potential client is in your local area or finds you through online searches and research.

This blog post provides guidelines to help develop a meaning to your target audience. This helps you to stand out from the crowd of business that provide similar services.

Once your target audience is aware of you, they feel inclined to learn more about you. There are two vital factors that communicate what your brand means to your target audience.

  1. Performance

What can you do to meet your target audience’s needs?

Five performance based categories meet the needs of your target audience:

  • Characteristics and features
  • Reliability
  • Durability or duration
  • Serviceability (effectiveness and efficiency)
  • Design and price

Potential clients will want to build on their awareness of your brand by trying to figure out important questions that define what you mean to them.

An example could be, ‘How effective will SME Needs strategic marketing plan be for my business in the short-term and long-term?’

Apply this line of questioning to your own business.

What factors of performance distinguish the service you provide for your target audience?

  • How much more could I get done to grow my business if I entrust all my IT requirements to this business?
  • In terms of efficiency, how productive can my project be if I engage with this consultancy firm?
  • How cost effective would it be to invest in this specialised equipment and how long will it run smoothly for?

2. Imagery

If your brand was a human, how would you be perceived?

Small businesses have personality in abundance!

This is something that you should capitalise in the way you communicate your brand’s image. This creates positive and strong associations and perceptions of your brand in the mind of the client.

Your target audience will form an image of you from their personal experiences with you, through targeted marketing or through word-of-mouth. As a small business, much of what image they will have of the brand will be associated with the personality traits of the owner.

Are you sincere and friendly? Spirited and imaginative? Or maybe you are reliable and hard-working?

As a small business, inject your brand culture into everything, from your logo, to your website, to the way you present yourself in meetings or at networking events.

At any touch-point with a potential or existing client, you should aim to have a consistent image you communicate. It is important to maintain your image and personality in both an online and offline setting.

An image is built over time. Therefore, it is about consistency in the way you push your brand’s meaning in your marketing message and communications.

Once you develop a positive brand image, the key values of your business will be reflected in the mind of the target client.

Your marketing communications and messaging transmits your key values.  This applies to both a physical and digital setting.

An example could be SME Needs reflecting trustworthiness through meetings that are personal and specific to understand your business needs to develop a tailored marketing plan.

Overview

Through a combination of performance and imagery, you enhance the meaning you have to potential or existing clients.

This then helps to secure a sale or a deal as the client understands how you meet their needs and also develop a strong sense of the values and personality your brand has communicated to them.

If you want to learn further how you can identify and improve your marketing performance and build a positive brand image, SME Needs is ready to support you and is only one click-away.

image to support article about sales and marketing working together

Sales and Marketing working together

By Marketing Performance, Small Business Marketing

image to support article about sales and marketing working together

 

As a small business, you measure your sales performance in a number of ways:

As a small business you measure your sales performance by number of sales, percentage of leads closed, percentage growth, etc…

All are valid ways to measure sales performance, but poor results may not be all the fault of the sales team. As someone who has spent most of my sales and marketing career on the marketing side, this isn’t the easiest thing to admit, but some of the issue lies with how (and if) Marketing & Sales are working together. Let’s look at the sales process to show you what I mean…

First contact

If the Sales team are calling outbound, they need to ensure they are calling the right people so, for now at least, let’s assume the first contact is an inbound enquiry…

Someone calls in and they are logged into your CRM (or other sales tracking tool), including a record of how they found you (which is a necessity for measuring market performance). They talk about why they’re calling and two things can happen:

  1. Qualified out. It may soon become clear to one party, or the other, that you cannot help them.
  2. Move further down the sales pipeline. It’s a good conversation and you both agree to at least a next step.

If this lead is qualified out, it is most likely to be Marketing’s fault (we’re assuming that the sales person isn’t brand new and not making rookie mistakes). Whether they found you via a natural search, a paid click or social media, the messages they read on your website did not accurately communicate how you help, what you do and they type of clients you work with.

In the middle of the pipeline

Some companies believe that Marketing’s role ends once the lead is created; we believe differently. Marketing’s role continues through the pipeline. It has a role in supporting the sales process:

·       Case studies need to be produced regularly to prove you deliver a consistent service/product to your clients.

·       Knowledge articles show the depth of knowledge and expertise within the business. These should be being shared with prospects, either via the sales person or through email automations triggered by new leads reaching a certain point in the pipeline.

·       Having a set of advocate clients, who are happy to talk to prospects during the latter stages of the sales process, is a joint Sales, Marketing and Account Management function. If you can get them to provide public reviews (Google, Feefo etc.), all the better.

Asking for the sale

At this point, it does become a Sales function. Marketing cannot ask for the sale, so if Sales doesn’t, there is a risk of losing the sale.

How to Maximise the Sales rate

1. Define your Ideal Client and Target Audiences

If your description of an ideal client includes the words anyone or everyone, you’re on a hiding to nothing and a lot of duff sales leads (or none at all). In the beginning, this is a conversation between the business owner and the marketing function.

Over time, the definition of an ideal client will change. Using what happened in your sales pipeline, you can fine-tune the Ideal Client definition. A teamwork approach from Marketing & Sales will ensure you are both working towards attracting the right audience.

2. Identify their pains, needs and priorities

No matter how you argue, your target audience cares not a jot about what you do. They care about how you can help them. They want what you do to help them with their priorities, deal with their needs and make their pains go away. If your marketing messages and content show how you can help them, they are far more likely to engage than if you simply talk about what you do.

3. Identify what you believe to be the best marketing channels to communicate these key messages to your target audience.

It doesn’t matter whether you really like using Facebook or Twitter, if your target audience doesn’t use them, there is no point in using those social media channels. If you are struggling to work out the right channels, we can help, or talk to your peers.

By collecting information on what marketing channels are working, you can fine-tune your choices.

4. Keep Talking to your prospects

Just because they didn’t buy from you this time doesn’t mean they won’t buy from you in the future. Even if they buy from someone else, they may want to talk again in the future, if their original choice proves to be unsuitable.

5. Get Sales & Marketing working together

If Sales are moaning about the quality of the leads, and aren’t talking to Marketing about it, they only have themselves to blame. When the Marketing team is just blaming Sales for not handling them properly, banging their heads together should help. If the leads coming in meet the definition of your Ideal Client, there are two possibilities:

  1. The Ideal Client needs to be re-defined as it isn’t quite right
  2. Sales are not following through correctly

Working together, Sales and Marketing can define and develop the right sales support materials, including timings and choice of transmission channel – digital or physical. Failure to do this weakens the ability of the Sales team to close the deal.

Everything we do is about marketing support for small businesses. If you are a small business and looking for some marketing support, simply call us on 020 8634 5911 or email us by clicking here.

6 reasons why you should stop doing social media

By A Helping Hand, Customer Understanding, Marketing Performance

Social media: love it or hate it, it has become part of our lives, both professionally and socially. Even if you aren’t using it, I bet your friends and acquaintances are and they are bugging you to use it as well.

For this article, let’s put aside personal use and look at whether you should stop using social media professionally.

Consistency is king

Your followers and connections are a fickle lot. They will love much of what you post and then Share/Comment/Like/Retweet, right up until the point they forget about you.

Why will they forget? If you aren’t appearing on a regular basis. We all have so many messages chucked at us on a daily basis, including lots more connections and followers on social media, it is easy to forget someone and lose track of what is happening.

If you’re just Shouting

Social media is called social media for a reason. If you want it to work for your business, you need to be sociable. If all you are interested in doing is posting your latest special offer, you are going to be wasting your time. If this is you, you really should stop using social media.

You’re just being negative

If all you do is criticise others, particularly without offering a solution, you’ll quickly get a reputation. Check out some of our MPs to see what I mean. Nobody likes to be criticised, especially if you are just being negative and not suggesting an improvement.

You’re not there at all

Not being there at all is even worse than being inconsistent. This is particularly relevant when you consider the activity of prospective clients or staff.  Almost without fail, the first thing someone does when they hear about you is check your online presence. They find your website and then follow that with your social media presence. If your Twitter/LinkedIn/Facebook accounts haven’t done anything for 6 months, what are they going to think?

You’re better off shutting down your account than having one that hasn’t been used for some time.

No traffic being generated

Your social media activity is, presumably, being done to generate new clients. If not, I am wondering why you are spending valuable time on there. The question is: how much website traffic are you getting from your social media activity?

If you don’t know, I refer you to our previous blog about Google Analytics and then recommend you see how much traffic you are getting.

If you aren’t getting any traffic, there are three probable reasons:

  1. You aren’t saying anything worthwhile (see point two above)
  2. You forgot to put any links to your site on your profile or in your posts (has been known)
  3. Nobody who is likely to buy from you uses that social media platform (see next point)

Any of these are bad and you need to identify which one is causing the issues and fix it fast.

If you disagree, I have a challenge for you: nip down to your local bank and try and pay your mortgage with Likes!

Your Target Audience doesn’t use it

Are you using the social media platforms you do because you use them in your personal life and so know what to do (?!?!) or is there another reason?

Have you considered which platforms are the ones your target audience is most likely to be using? Let me give you some examples:

  • If you sell to Managing Directors of technology businesses, they are highly unlikely to be on Facebook (at least in a business mood) so activity on there would be a waste of time. Moving to LinkedIn (18,366 in the UK alone, plus another 8,648 CEOs) would be a far better option.
  • Launching a new restaurant in St Albans via LinkedIn may not be the best idea (although there are 84,394 people from St Albans on LinkedIn, including 1 food critic). Adding great images of the food and the restaurant on Instagram and/or Facebook may be more effective as people are thinking more about their leisure time

Signing Off?

Do any of the above resonate with you?  If they do, you need to carefully consider whether you should stop using social media for your business. After all, your time is precious and you need to maximise your use of that time to generate leads for your business in order to grow.

I hope this helps

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dump em - the prospects not engaging with your marketing

Dump those who aren’t engaging with your marketing

By A Helping Hand, Customer Understanding, Marketing Performance

dump em - the prospects not engaging with your marketingAs a business owner, you want people engaging with your marketing.

That means it grabs the attention of your target audience, it educates them on why they should use your product/services and they jump willingly into your sales pipeline as a new lead. Marketing engagement is key.

If people aren’t engaging with your marketing you have two choices:

  1. Continue trying to engage them
  2. Dump ‘em

Let’s look at the options.

Continue trying to engage

People who really aren’t responding to your marketing are sending you a message: they’re not interested! If they really aren’t opening any of your emails, responding to your social media activity or even taking your calls, you have to consider whether this is a good use of your time. If they were interested, they would be interacting at least some of the time.

  • They are consuming your mental energy because you believe there is still an opportunity for a sale with at least some of them.
  • You spend time liking, retweeting and responding to social media posts. Time that is a scarce resource.
  • Keeping them on your mailing lists impacts your marketing stats, making open/clickthrough rates lower than they should be.

Dump ‘Em

If you simply remove them from your mailing lists (what member rating do they have in MailChimp?) and stop engaging with their social media, you have that most precious resource to invest in those who are engaging.

Those who are engaging with you want to know more. They want you to talk to them and they are far more likely to buy from you.

The consequences

Let’s think about all of this:

Who would you rather invest your time in? Those who are engaged are likely to buy from you and your time is far better spent on them. Which is a safer bet: 3:1 or 50:1?

There is a slim chance that those who aren’t currently engaged will come back to you. It may be that they aren’t ready to buy from you just yet. I know I’ve suggested you take them off your mailing list (GDPR and all that), but that doesn’t mean you have to cut all ties. You may still be following them on Twitter and you may still be connected on LinkedIn. What’s more, by giving your time and mental effort to those more engaged, you ensure your business is still around when others return.

social media likes

Likes don’t pay the bills – a targeting case study

By A Helping Hand, Customer Understanding

social media likesSocial media is a wonderful thing. Used well, it will drive brand awareness, maintain connections with your stakeholders and generate leads. But used poorly, it can chew up your time for very little return.

As you will see every 4th week, going forward from here, we will be using a case study to demonstrate what our blogs have been discussing for the previous three weeks.

An e-commerce company I have worked with has been using social media as part of its marketing mix for several years now. They would run competitions monthly to engage their followers and encourage them to interact and increase the reach of their brand. It seemed to be working too. The number of Likes continued to increase.

However, there was a problem. Our research showed that their typical buyer was a middle-aged man. This man lived in a suburban or rural location with a fairly big house and garden.  With an average unit sales value of around £300, the buyers needed to be fairly affluent.

When we ran the same research within their social media audience, the results were somewhat different. Middle aged women in urban locations were entering the competitions to win prizes that they would rarely use.

The audience they were attracting on social media was not there to get to know the brand, to flow through to their website and buy from them. They were simply there to win the prizes.

So what does this say about their social media?

They are attracting the wrong people!

But they have 1000’s of Likes and Follows I hear you say. The problem is that they aren’t getting what they really want: sales.

There is little point in spending time and money running social media campaigns that attract the wrong people.

The solution:

  • Post content that will attract their target audience.
  • Perhaps run Q&A sessions around what they sell to help people use their purchases more effectively.
  • Encourage customers to follow them on social media and post comments/images of their purchases in action.

What they need is their customers’ peers to engage on social media, so that they are tempted into buying. I’m not saying this is easy, but it’s got to be better than wasting money giving away stuff that isn’t encouraging others to buy.

I hope this helps

 

Moving from Ideal Client to Target Audience

From Ideal Client to Target Audience

By A Helping Hand, Customer Understanding

Moving from Ideal Client to Target Audience

Last week’s blog defined an Ideal Client and the fact that having a solid definition of who (it is always a who) is your Ideal Client helps you to focus your marketing and be more effective. Now let’s look at what happens when you market to this highly focused group.

Let’s define your target audience as HR Directors of UK companies in Information Technology.

Let’s imagine your service helps HR Directors to assess the skills and attitude of developers via an online portal. Although there are lots of developers out there, finding one with the right mix of skills is not easy. Your reason for targeting companies with HR Directors is purely size.  These companies probably recruit developers regularly as they look to grow their development team or simply replace those that leave.
LinkedInAccording to LinkedIn, there are currently 532 in the UK-based HR Directors of IT companies.

You have developed a series of key messages that talk of how you can help these HR Directors. You have a convincing set of evidence which proves you can walk the walk. Your marketing programme aims directly at these 532 (or more) HR Directors of UK-based IT companies.

Let’s now look at who else your key messages are likely to resonate with:

 

UK HR Directors

Depending upon just how your application is written, I am sure that every other HR Director in the country also worries about recruiting the right people with the right skills and attitude.

Maybe you’ve done some work for companies who aren’t in the IT sector and could use that evidence to talk to other HR Directors if they get in touch.

There are 4,066 HR Directors in the UK.

UK HR Managers

Companies that don’t put enough credence into the HR role may only have a HR Manager, or they may be a little smaller than your Ideal Client. They still have issues in recruiting good staff and your application may be able to help them.

There are 58,932 HR Managers in the UK

So far we haven’t even left the UK and the marketing programme you develop to focus on just 532 people may resonate with a further 63,000 people.

Your outbound marketing will be aimed specifically at your core audience, but the supporting content marketing and inbound activity is highly likely to generate 78 enquiries from within this audience of 63,000.

Would you turn them away?

image to support article about your biggest client

Why 35% is too big

By Customer Understanding, Marketing Performance

Do you want a big client?

Having a big client is great isn’t it?

A big name that other prospects should have heard of when you tell stories about your current clients

They spend a lot with you, allowing you to grow the business

However, there are some issues to think about.

Very early on in the relationship with any new client, we analyse their business and marketing performance. As well as understanding what marketing is and isn’t working, we look at your share of available wallet and how much of an impact clients have on your business.

Our general rule of thumb is no single client should be more than 35% and ideally not more than 25%, let us explain why.

Why a big client isn’t good for your business.

There really is just one reason: if you lose them as a client, it will decimate your business!

When we analyse client impact, very few clients escape from Pareto’s Law. 80% of turnover is delivered by 20% of clients. Although we rarely have sufficient data to see client profitability, it is highly likely that the bigger the client, one of two things happens:

a client delivering 35+% of turnover delivers even more of the profits, or

far too much resource is committed to that client and so they become unprofitable.

Whichever of these happens, if this client decides to use another supplier, you lose a huge amount of the cash coming into your business. You then cannot meet your commitments. If they are an unprofitable client, there is a chance you can survive as a business. However, you need to make the cost cuts quickly in order to continue.

Size Doesn’t Matter

By Marketing Performance

Too many businesses, and people, are obsessed with size. They believe bigger is better. If we are talking about ice cream portions or wine glasses, this may be true. When we’re discussing marketing data, it really is a case of size doesn’t matter.

Let me be blunt:

  • More LinkedIn connections doesn’t make you a better entrepreneur
  • More email addresses in your mailing list doesn’t mean you’re a better business
  • Putting more money into your marketing budget doesn’t mean you will grow faster

Why?

To maintain the innuendo, it’s what you do with what you’ve got that counts.

Let me explain.

LinkedIn connections

There are many people who will look down on you if your LinkedIn connections number doesn’t say 500+. They are deluded into thinking that having more connections will mean that more people will see what they write in their updates and that will lead to more sales. They will see that XXXX people saw their last update and think that their use of LinkedIn is great. Actually the real measure is the number of people who reach out via LinkedIn and ask for your services. Which is better?

30,000 connections, 2000+ impressions a day and 2 calls per month, or

450 connections, 80 impressions a day and 4 calls per month?

Have you ever asked a LinkedIn connection for an introduction to someone you want to talk to? How often do they respond “of course” and they fire off an introduction email via the LinkedIn functionality? Alternatively, do they respond along the lines of “I don’t really know them that well….”?

If you think of LinkedIn as one big networking event, you are far more likely to be introduced or referred by people you know, like and trust. If you are connected simply because you accepted a connection request, what’s the point?

Of course, if you have steadily built up a network that reaches into the 1000’s and you still know what each of them does and what they are looking for, that’s great because I am sure you are generating a huge amount of new business from your network. You are a rarity!

Mailing list size

Turnover is vanity, profit is sanity and cashflow is reality – as the saying goes. It’s the same with email marketing…

List size is vanity, open rates are sanity but click throughs are reality.

In other words, why send out 1000’s of emails if few people are engaging? You are far better off having 1000 people, a 20% open rate and 5% click through than a 1% open rate because you have 50,000 on your list. This is particularly relevant if your email marketing tool charges you per email!

The number that is better in email marketing is the variants of any email. The more variants that show the recipient you are talking to them, the better. Relevancy and personalisation are key to developing high open and click-through rates.

Marketing Budget

The standard number for B2B companies is 10%. You should be investing 10% of revenue in marketing your business – outside of salaries. For some companies, this may not be possible if gross profits are below 10%, but it should be for most. Some companies invest far more (Red Bull: 38%) than others but they have expensive “hobbies” such as Formula One and air racing! Saying that, it works or they wouldn’t be able to spend that sort of money.

The size of your marketing budget depends on the size of your target audience and the return on investment. If you simply throw more money at your marketing, you may be lucky and get more leads and sales, but that will only be if you invest in the marketing channels that are delivering that ROI.

I am sure you can think of many more ways where businesses think that bigger is better, but these are the key marketing faux pars. I hope this helps.

Use your marketing data wisely

By Customer Understanding, Marketing Performance

We’d like to say a huge thank you for joining us at the IoT Tech Expo Europe!

This was the opening line to an email I received last week.  That’s very nice of them, you might think, but there is a problem with this… I wasn’t there.

Don’t get me wrong. I did intend to go and I did register, but I never got the time to attend, as it was one of those “I’d love to have a nose around” events.

Up until then, the marketing team had done everything right:

  • I’d been thanked for registering
  • They sent me a link to get my delegate e-badge
  • They kept me up to date with what was happening

As you cannot get in, and sometimes even out, of these events without having your e-badge scanned, there’s no excuse for not knowing whether I was at the show. It goes without saying that these emails were written before the event even took place, but I can only assume they didn’t add attendance data to their automation tool, but they had a week to do it.

The lesson: don’t try to do things your marketing data doesn’t support

My Tips:

  • Draft your emails well before the event, so you have time to make any adjustments you need to.
  • Personalise them based only on the data you have or are going to collect.
  • Manage your marketing data and make sure the data is added to the relevant tools.
  • Keep it simple the first time. Better to deliver a simple message well than a complicated one poorly.

I hope this helps.