A friend of yours invites you a charity gala dinner organised by her business. By coincidence, you both turn up at the same time, her Jag just beating your Golf into the car park.
What do Jet Skis, Hoovers and Velcro have in common?
“We need more leads!” The familiar cry of business leaders up and down the country.
In a growth-driven world, businesses often focus on the new: new markets, clients, products or services. Too often they miss our most reliable source of profit – existing customers. The probability of selling to an existing customer is somewhere between 60% and 70% compared to between 5% and 20% for successfully selling to a new prospect. They’re also cheaper to market to, it costs three times as much to win a new customer as it does to retain an old one.
You’re a Premier League football manager, watching your team play the last five minutes of a crucial title decider. In that moment, what do you need to know?
Stats are so ubiquitous in the game now that you could find out the number of tackles made; the possession achieved by each side; or how many metres each player has covered across the pitch.
Is there a more contentious marketing issue for small to mid-size business than CRM?
What exactly is marketing? A lot of people think of it as the visible stuff: the posters, the adverts, the social media campaigns, the email newsletters. And while these are certainly elements of marketing, they are simply tactics and strategies to reach a specific goal. With no clearly defined goal or purpose, all this activity is meaningless. For any organisation, of any size, the key goal of any marketing activity should be working towards - or directly impacting - the bottom line. Marketing is a combination of planning and budgeting - but to be successful, there needs to be a measure of what success actually looks like: your return on investment.
In 1910, two teams of explorers - one from England, one from Norway - raced across Antarctica in the the ill-fated Terra Nova Expedition; a competition to become the first to set foot on the South Pole. The Norwegian team, who spent a year planning their journey by surveying the inhospitable landscape in detail, won by more than a month. Led by Captain Robert Scott, the British team instead focused on raising cash for expensive scientific equipment and a gamut of transportation methods. Scott - along with all four of his British teammates - not only lost the race, but died on the gruelling journey home.
Many business owners have a fuzzy vision of marketing, even if they run successful companies. A lot of businesses attempt to cover their marketing bases by simply turning their Sales Director into a Sales and Marketing Director and moving on, assuming that the marketing box has been comprehensively ticked.
This is what happens when business owners confuse lead generation with marketing. Lead generation is a part of marketing, but it’s really just the visible bit of an iceberg - the obvious bit that everyone sees. The much bigger picture lies beneath the surface - the activities that happen prior to lead generation.
So what does happen below the surface? What
Marketing Planning v Marketing Communications
You might have heard of the seven Ps of marketing:
Looking through these, there are some areas that you might not immediately associate with marketing - setting the price of products, sales processes, service delivery. But that is the point; marketing permeates every element of the business. Price, for example, is part of marketing - finding out what people are prepared to pay to have their pain points addressed.
This is the crucial difference between marketing comms and marketing strategy: comms is a culmination of a whole host of deeper strategic work.
- Product: What are you selling and to who?
- Price: Is the price aligned with the perceived value of the product?
- Promotion: What messaging will you use to describe your product? What is the right combination of words and tone to strike a chord with your target audience?
- Place: What are the most appropriate routes to markets for your product or service?
- People: Have you got the right service delivery and sales teams in place?
- Process: Have you defined and documented your methods for delivering your end product or service?
- Physical Evidence: Have you defined a tangible “thing” that the customer will receive, even if the service is intangible? (An insurance certificate for an insurance policy is a good example, if you’re stuck on this.)
The Four Pillars
To explain the key functions of marketing, The Marketing Centre has developed a strategy which simplifies these ideas down to four key pillars:
Whether you’re talking about seven Ps or four pillars, the message is the same. Clearly define who you are, what you sell and how you sell it. Know who you sell to and ascertain the best methods for reaching them. Have the processes in place to nurture leads and convert sales, then keep these customers on board, or have a plan to win repeat business.
- Define: Know what your potential customers look like, and what your product or service can do for them.
- Find: Identify ways to target them, based on their behaviour and habits.
- Win: Devise strategies to close sales and create customers.
- Keep: Monitor customer churn (loss) and create retention activities to remedy it.
A note on leads
The key objective of marketing is to help increase sales and grow the business, but
a lack of leads is rarely the problem
. Very few business owners want to hear that the problem lies in the product or the planning, but this is more than often the case. And sales teams can be especially reluctant to accept that message, who often prefer to have more leads than do a decent job with the ones they’ve got. Revisiting what was assumed to be a successful formula is never a welcome task for those who created it.
This investment of time and effort in the status quo means those people often struggle to be objective about any shortcomings. This is when a fresh pair of eyes – like those of a part-time Marketing Director – can make a difference.
Back to Basics
Success often comes down to fundamentals. In marketing, the fundamentals are not the channels you choose. They are not social media, PR, direct mail, advertising or content. The building blocks for success come from understanding what you are selling, who you are selling it to and why they should buy it. That is why marketing is rarely a case of ‘he who shouts loudest’. It’s a nuanced, agile and measured approach that factors in every element of the business. Generating leads is an important part of this process, but not the only one; not by a long shot.
Marketing is often perceived by outsiders as being a creative industry, and, indeed, much of it is. Marketing stereotypes are often caricatured as “quirky creatives” or “flashy account managers”. But would you look at a picture of someone analysing multiple strands of data, and instantly think “that’s a marketing person”? Probably not. Statistician or accountant, perhaps, but marketing director? Unlikely.
Those perceptions should be put aside: the most important thing to consider when it comes to marketing is data - customer contact details, website analytics, email click throughs etc. Get data management, analysis or reporting wrong and everything else that follows is potentially wrong, too.
But many businesses
use or manage data correctly, costing them dearly in wasted marketing spend. And, with
(the General Data Protection Regulation) coming into force in May 2018, these companies will now be forced to look at data from a compliance point of view. So, whether it’s for profit or penalty, a strong understanding of data is a must.
What data do you have?
You’re likely aware that your business is sitting on a lot of data. For many business owners, though, the challenge is understanding the value of that data, and then knowing what to do with it. Whether it’s 500 contacts or 500,000, the best place to start is with an audit of the data you already hold.
At its most basic, ‘good’ customer data is complete, i.e. without bits missing. If you haven’t got, as a bare minimum, name, company name, personal email address (not info@xxxx or sales@xxxx) and phone number, it’s not complete. If you’ve got data that’s over a year old, the chances are that it’s getting out of date. By two years – it’s definitely out of date.
If there are numerous gaps, missing information and duplicate details then you must invest in cleaning it up, and storing and managing it properly. Once cleaned, we would recommend drawing up a best-practice guide for data collection and entry to everyone in the business.
What does data look like?
Data can be split into two broad areas: internal data about customers you already have, and external data about customers you would like to have.
Internal data is a known, but external data is often an approximation – a best guess, if you like. Suppose you’re advertising a product. Where would you promote it to reach the sort of people you think would typically buy it?
Certainly, you might decide on channels to use – like social media or direct mail, outdoor advertising or radio, for example – but beyond that you have choices. Which radio station? What type of social demographics? Which data list for direct mail and what neighbourhood and passing traffic for your outdoor campaign? Your internal data will give you some good clues.
Segmentation is a huge topic -
and one we’ve explored in detail here
- but it’s right and relevant to provide an overview here.
Whether your data is housed on a few spreadsheets or a whiz-bang CRM database, make sure you split your customers and your prospects at the very least; the messaging and marketing to each will be
More than that simple split, you can also segment by product or service: Who buys what? How often? How long does a sale take? What are the top five lead sources? What is your most profitable service or product? Could it be cross-sold to people who don’t already buy it? Cross reference your internal and external data and look for patterns that might indicate buying trends or signals.
Aside from the direct marketing and sales benefits of a clean, segmented customer list, you also use your data to profile your customers: What do they have in common, where are they and what do they like and dislike about you and your competitors? After all,
the best way to identify potential customers is to analyse your existing ones
. Get that bit right and the chance of your marketing communications (the creative stuff – ads, mailers, social media – whatever channels you are using) working better will be much higher.
Use the data to generate the right information and you will be talking to people who should be interested in what you have to offer – based on their needs, demographics, or circumstances. People like to buy rather than be sold to. So, by careful management of data, your campaigns should be received by more receptive people, who are therefore more likely to engage with you. You will also reduce “wastage” costs associated with targeting people who do not match your typical customer profile.
Accurate targeting also means that topline customer stats – cost per acquisition, cost per lead, conversion rates and so on – will paint a far more accurate picture of their market and inform future decisions even more effectively.
We live in an age where digital traffic can be easily monitored. Using tools like Google Analytics and Webmaster Tools, we know how many people visit our website, which pages they view and for how long. Internal data like this must be factored into decisions regarding external data. Think of it as fact-based marketing: If you base your decisions more on what you know than what you assume, the chances are that your success rate will increase.
GDPR is coming – what you need to know
The General Data Protection Regulation comes into effect in May 2018 and will dictate how your data should be stored and managed. Email marketing will have a mandatory opt-in not opt-out rule, meaning that anyone you email must have given you specific permission to send. It’s the same with SMS, too. But postal and telephone will be opt-out. That’s just the start, and we’ve covered GDPR in detail
elsewhere on the blog
so we don’t need to go into too much detail here, but safe to say, this is a huge, far reaching overhaul with implications for businesses of all sizes and industries.
While GDPR shouldn’t be the trigger for upping the ante on your data management, for many companies it has been. Having ignored the potential of great data management in the past, some businesses are now begrudgingly adopting strategies to comply with the new legislation. What many of them don’t realise is that they will very likely profit from it in the long term as well through higher quality and better protected data on both clients and prospects. The richer your data pool, the greater the opportunity.
Big data – big opportunity
The proliferation of data in our society holds profound opportunities for businesses. Good data analysis and management means better targeting, compliance with the new regulations and less wasted spend targeting the wrong customers. And who is going to argue with that? Many of our part-time Marketing Directors are helping companies get to grips with data for both profit and compliance. Talk to us to find out more.