Initially, we were surprised at how few business owners or marketing managers could answer off the top of their heads, but we soon came to learn that this was because the traditional approach to marketing is completely back-to-front.
Our two questions are:
1) How many new customers do you want?
2) How much are you willing to pay per customer?
The most important feature of highly accountable marketing strategies is that they start with the outcome and work backwards to find the most cost effective route.
We call this goals-based marketing.
Many clients come to us initially with an arbitrary budget, and the desire to hand it over to someone who knows where to spend it to get the best return. That’s understandable, but the uninformed handover-takeover approach is what has allowed the Marketing industry to develop a smoke-and-mirrors reputation.
The challenge for evidence-obsessed agencies like ours comes when a prospect phones up and requests “SEO”, or “PPC” because it’s something they feel they should have, or have been advised as such by a third party.
Buying an off-the-shelf marketing package like this is akin masking the symptoms of a mysterious headache with aspirin, and there are marketers who take advantage of this.
Often, it’s not because they’re inherently exploitative, but because they spend all their time on account management leaving none spare for research and testing – a focus on short term survival that undermines long term success. Agencies that simply want more business will say “Ok”. Agencies that want the best ROI for their clients will ask “why do you think you need SEO?” Or whichever of the digital channels the prospect has specified, seeking to understand the bigger picture.
With goals-based marketing, complete transparency is the only option.
Armed with the two key numbers we mentioned above, your agency should be able to tell you if your goals are achievable in the budget given, and show their workings.
With a PPC campaign for example, they should be able to tell you as a minimum:
1) Your break-even Cost Per Click
2) Your break-even Conversion Rate
If your goals are slightly beyond your budget, the agency should be honest and say so, providing a financial explanation. Maybe your budget is too small to compete against your rivals’ AdWords campaigns, maybe PPC investment isn’t worthwhile till work has been done to improve your site’s conversion rate. These factors are discoverable thanks to the revolution in measurability the marketing industry has gone through, where digital channels can be tracked, analysed and reported on at a high level of detail.
We hope the information we’ve shared will help safeguard your budget against wasted marketing spend!
If you’re a company with an in-house digital marketing team, we’ve produced a useful guide with various money saving techniques for PPC and Adwords. If you use an agency, or are considering doing so, download the guide anyway. It’s free, and it’ll provide a useful quality benchmark to ensure your fees are being well spent.
To find out more about the processes and techniques we’ve described here, you’re welcome to call us on +44 (0)207 148 6743.
Category: Strategy, Thoughts
15 May 2015
By Eva Wilkes