While business can be divided into boxes (planning, admin, HR, sales, marketing, financial management, strategy, accounts), the truth is that no areas of business function in isolation. Some of the biggest organisations in the world are successful precisely because of an understanding that each section is a part of the whole.
The same is true of marketing. Marketing is the product of good business planning and strategising. It’s what drives sales, and ultimately what makes profits. But it cannot exist in a bubble. The days of designing a campaign and shouting it to consumers is over. Technology has redefined the way the world works, and marketing is no different.
“Today’s consumers are empowered,” says Ivan Moroke, group managing director of TBWA/Hunt/Lascaris. “They are informed, they expect transparency and they want to interact with brands at different levels. Traditional ‘push’ marketing still has a role to play, but it needs to be combined with other forms of marketing as well.”
In order to reach informed consumers who care about the world, businesses cannot ignore the social, political and economic landscape either. Marketing is about creating a message and then reaching consumers. To do that, it’s important to understand what consumers react to or are looking for — and then aligning this with the company’s own goals and identity.
“South Africa is particularly interesting in this regard,” says Moroke. “We are a relatively new and fast developing country. South African consumers are looking for an identity. Their fingers are on the pulse of change and there is a lot of class mobility. Companies that fail to realise this and react to it will not communicate with their target audience.”
For an example of how consumerism has changed, look at trends that have emerged in the current recession. A tightened economic environment has affected consumer and business buying behaviour. “Pre-recession emotion was a key driver in consumer decision-making,” says Moroke. “People were using money they didn’t have to buy things they didn’t need to impress people they didn’t know.
“And marketing followed suit. Marketing campaigns focused on communicating messages to the heart. The recession has changed that. South Africa may have been largely sheltered from the storm, but we were still affected. There has been a shift from the heart to the mind, from consumers on the street, to SMEs right through to large corporates. Everyone is evaluating price and informing themselves on the products and services on offer.”
This does not mean that companies and brands should no longer appeal to the heart and emotions at all, but it does mean that bad products and services can no longer be hidden with frills. “People are interrogating brands. As a company you need to ask yourself: Can we stand up to scrutiny? And if you can’t, what are you going to change to make sure you can?” asks Moroke.
Communication is key
According to Moroke, the first question every company should consider before even looking at marketing is what value their customers derive from their product or service. Grant Leishman, CEO of PenQuin International, agrees.
Working backwards from the ultimate objective of business (to sell products or services), and using marketing to achieve this goal, companies must come up with their ‘big idea’. To do that, they need to know what their message is, and to do that, they need to know what they are selling, who they are selling it to, and how much they need to sell. “Without strong company objectives, it’s almost impossible to come up with that big idea,” Leishman says.
“Marketing can’t cover up fundamental wrongs in a product or service,” says Moroke. “To put it bluntly, a pig with lipstick is still a pig. If you want people to choose your brand, you need a proposition they can buy into. Marketing is simply the way you communicate that proposition. Never just make things up. Your customers will eventually realise what you are doing and your brand will be damaged. Sit down and really figure out what your proposition is, and what your differentiators are from your competitors. If you find you don’t have a strong proposition, perhaps you need to go back to your product and service and relook your business model.”
1. What is your business selling?
Ask yourself the questions: What do I do? What am I selling? How much do I need/want to sell?
2. Find your customer
Who is your product or service for? The more specific you are about your target audience, the better your value proposition will be, and the more success you will have with your message. Remember: today’s consumers want to have a conversation with you and your brand, but in order to do that, your message needs to be something they care about.
3. Find your brand truth
Moroke’s advice is simple: Write on a matchbox what you are selling. “No matter how sophisticated your product or service, the first step is to be able to communicate what you do in one simple sentence that will fit on a matchbox — no frills,” he says. “The sentence should communicate one simple message: This is why people should buy my product or service.
“No brand can be everything to everyone. If you try and create a message that appeals to too many people, you will end up with nothing. This is why it’s so important to know who your customer is.”
4. The idea
Once you know what your business is selling, who it is selling to and what your brand truth is, you can develop your ‘big idea’, which is basically the message that your marketing campaign wants to project in order to start a conversation. “That big idea should have nothing to do with the company’s budget,” says Leishman. “Many companies, especially SMEs, shy away from conceptualising big ideas because they don’t want to allocate too much of their budget to a big marketing campaign,” he says. “Don’t let your budget hinder the idea. Rather have the idea, and then find creative ways to implement that idea based on your budget.”
5. Implementing that idea
In today’s marketing world there are a host of different ways to get a brand message across, from traditional to digital platforms, print ads to social media. An integrated marketing strategy is vital, but it’s up to the company to determine which platforms make the most sense for what they are selling, and who they are selling it to. “Not all platforms suit everyone,” says Leishman. “Every company should have a strategy and a website as a starting point, but not everyone should be on Facebook, for example. It depends on what you are trying to communicate and who you are talking to. The vehicle for your message is as important as the message itself, but don’t be restricted by which platforms you should use. The idea is to create a conversation. What is the best way for you to do that?”
6. Stay focused
Know who you are targeting and stick with it. Marketing does not have to be complicated. The rules are the same for everyone, from SMEs to large corporates. The budgets may differ, but the goal is the same: create the right message, reach your target audience and convince them to not only buy what you are selling, but tell other potential customers to do the same.
“What you ultimately want is to find the evangelists in your consumer group,” says Leishman. “Once you have them sold on your message, they will push the product or service for you — and people trust other people.” The secret to evangelists is that in order to earn that kind of loyalty, brands need to deliver appropriately and consistently. “You can’t make promises at one level and then not deliver,” he says. “This goes back to the fact that you need a strong proposition to begin with, and a clear idea of what value your brand is offering.”
Useful Marketing Tactics For Growing Businesses
Customer acquisition, customer experience and content marketing can be identified as the three most important marketing strategy areas to focus on.
Digital marketing offers the business world so many advantages, including the ability to communicate with their target markets quickly and easily. Unfortunately, digital marketing has also opened doors for companies to flood mail boxes, news feeds and ad spaces with junk mail and spam resulting in customers tuning out to anything irrelevant and suspicious.
Customers have become less likely to trust companies and less receptive to messages. The only way for valuable messaging to stand out from the noise is if a business knows how to market itself properly.
Over and above advertising, there are a lot of other aspects that contribute towards an effective marketing strategy, these include research, email, content creation, list curation, social media and even customer service. To be a successful marketer it isn’t necessary to become an expert in every single marketing tactic, but it is important to master the most important areas. Customer acquisition, customer experience and content marketing can be identified as the three most important marketing strategy areas to focus on.
1. Customer acquisition
Of course, not all customers are the same. Some customers are only interested in buying products on sale from a particular brand and then never interact with that brand again. Acquiring, and of course retaining customers with a high lifetime value should be the overall objective for businesses, but this requires more time and money being invested in better, more qualified leads. While the upfront costs might be higher, in the long-term this investment will pay off with continued business from these lifetime customers.
2. Customer experience
Competitive pricing can’t be the only aspect that businesses focus on in order to stand out against competitors. In the current digital era customers expect a good customer experience when they deal with brands so this should be an important focus area for all businesses. Customers expect fast and seamless experiences such as intuitive user interfaces and processes, fast websites and service response times, as well as accurate information about the problems they face.
Customers don’t want to waste their time on websites that require them to jump through hoops, and they definitely don’t want to feel misled by anything a business is communicating. Customers will quickly move on to other sites that offer better experiences as well as other businesses that are more trustworthy. Good customer experiences can go a long way.
Offering more personalised, interactive engagement tactics and improving the customer technology interface should be high priorities for businesses.
3. Content marketing
Marketing is no longer about telling customers that your brand is the best. With the movement towards content marketing, marketing has become about showing customers why you are the best. Content marketing is a legitimate, effective strategy that every business and brand should make use of. While content marketing is a lot more cost effective than outbound marketing, it also generates three times as many leads and offers many other benefits.
Content is a key feature for growing businesses who want to survive in an information rich environment. Customers are looking for brands that provide value beyond their products so creating high-quality content can help you grab your audience’s attention.
Although there are many other factors that are involved in an effective marketing strategy, seeking out customers with a high lifetime value, providing them with a great customer experience while also providing them with valuable content is a recipe for success.
An ‘Outside-the-Box’ Approach to the e-Commerce Unboxing Experience
Get started by keeping three elements in mind – recyclable/re-usable packaging, personalised thank-you notes and free samples.
With a predicted 24,79 million e-commerce users in South Africa by 2021, online shopping is here to stay, making it impossible to escape the predicament of perfecting the art of product packaging. It’s time to think outside the box when it comes to creating a meaningful unboxing experience. Get started by keeping three elements in mind – recyclable/re-usable packaging, personalised thank-you notes and free samples.
Certain types of product packaging are having a tremendous negative impact on our environment, with 5.35 trillion pieces of plastic debris littering the world’s oceans, and with 269,000 tonnes of this amount floating on the surface – and plastic isn’t the only culprit. Did you know that it’s impossible for Styrofoam to ever be broken down completely? And that 1 million single-use coffee cups wind up in landfill every single minute of every day? These statistics make it obvious as to why it’s becoming so important for business owners to be more conscious about the type of packaging that they use.
Many business owners wonder if their customers really care whether their business is doing its part to protect the environment. According to Forbes and a 2017 Cone Communications CSR Study, the answer is a resounding ‘YES, they most certainly do!’.
87% of the consumers surveyed stated that they always have a more positive image of a company that supports social or environmental issues, and 88% claimed that they usually feel more loyal toward a company that they know supports social or environmental issues.
Thoughtful Thank-You Notes
The unboxing experience should be a unique and personal one, and it should be just as memorable as the experience of utilising the product itself! So, make it all the more special and build customer loyalty by including a personalised thank you note. Address the customer by their first name, thank them sincerely for their patronage and end off by giving them some helpful advice regarding the product, or share an interesting benefit of using it. Go the extra, extra mile by hand-writing the letter too.
Everyone loves getting free stuff. Why not bolster the unboxing experience by sending over a little bit more than expected? Not only will a free sample put a big smile on the face of the receiver, if they actually enjoy using it, there’s also a good chance that they’ll be coming back to order more. According to Shopify, free samples have the potential to boost sales by as much as 2,000%.
When it comes to packaging, make the right choice. Sustainable, thoughtful, memorable. Your customers, and the environment, will thank you for it.
The Facebook Ads Strategy That Can’t Lose
It’s a numbers game.
Running a profitable Facebook Ads campaign is simple. Not always easy, but simple.
There is a formula that can guarantee a profitable Facebook Ad campaign. Once you know the formula and the values to plug in, you’ll never sink money into a losing digital ad campaign again. I know it sounds too good to be true, but stick with me…
The Guaranteed Growth Formula
Here’s the entire formula: CPA < AP
Were you expecting coefficients, remainders and dividing by polynomials? Nope, there are only two values that matter when assessing your digital marketing funnel.
1. CPA – Cost Per Acquisition
2. AP – Average Profit Per Client
If your Cost Per Acquisition, the amount you pay to generate a paying customer using Facebook Ads, is less than the Average Profit you make from each new customer you’re guaranteed a profitable campaign.
Calculating Average Profit
To get average profit per client, sum your total revenue from new clients and subtract what you spent to serve them. Divide the result by the total new clients. For example, if you made $75,000 from 10 new clients over the past year and it cost you $40,000 to serve them, your average profit is:
($75,000 – $40,000) / 10 = $3500 Average Profit Per Client
If your average acquisition cost for similar future clients is less than $3500, your campaign will technically be profitable.
Of course most businesses won’t want to spend all of their profit on acquisition. An average business can expect to invest at least 7 percent but no more than 15 percent of revenue in sales and marketing. If Cost of Goods accounts for 60 percent or more of total revenue, your low profit margin may make it difficult to afford successful advertising. Decrease operating costs by increasing efficiency or adjust your margin by raising prices.
Don’t make the mistake of calculating Average Profit based on revenue only from the first sale. Use at least six months of revenue or your lifetime client value as the basis for your calculation, or you risk underfunding your marketing and sales budget.
Calculating Cost Per Acquisition
Let’s assume you’ve considered all of your marketing and sales costs and determined you can spend $350 per new client on Facebook Ads. Let’s reverse engineer your ad campaign to see if a $350 cost of acquisition is reasonable.
The simplest Facebook ads funnel includes four metrics that build upon each other to determine your acquisition cost. I’ve included standard benchmarks for use as a starting point, but your results may differ:
1. Click-Through Rate (CTR) – Percentage of people clicking on your ad. Your CTR should be near or above 1 percent.
2. Cost Per Click (CPC) – The cost of one website visit. CPC should generally be below $3.
3. Lead Conversion Rate – The percentage of site traffic that becomes qualified leads. This value should be 20 percent or above.
4. Sales Conversion Rate – The percentage of leads that convert to a sale. Aim for sales conversion at or above 5 percent. (E-commerce companies often skip the Lead Conversion stage and have a Sales Conversion Rate of 1 percent or greater.)
If 10,000 people view your ad at a 1 percent CTR, you’ll get about 100 website visits. At a $3 CPC, you’ve spent $300. Since 20 percent of your traffic will become leads and 5 percent of those leads become closed sales, we can calculate that you’ll generate approximately 60 leads and three new customers.
Your estimated acquisition cost using Facebook Ads is $100 per client, which is well within your budget of $350. This cost may rise as you scale and target less optimal prospects, but as long as your acquisition cost is less than $350 you’ll make an acceptable profit.
Complex funnels can include several ads and conversion points, but the Guaranteed Growth Formula of CPA < AP still applies. There’s no immediate reason for concern if your metrics differ from the benchmarks. You can and should split test ideas for improvement if your numbers are far from what you expect, but don’t mess up a good thing until you’ve got a better one.
Optimising Your Guaranteed Growth Funnel
If unhealthy metrics cause your acquisition to cost more than what you’ve budgeted, start with these adjustments:
Click-Through Rate Too Low or Cost Per Click Too High
If your CTR falls far under 1 percent Facebook may stop showing your ads or show them to second-rate audiences causing your traffic to tank and CPC to increase. To improve your click metrics, adjust your ad copy (headline and body text), ad creative (image or video) and highlight the benefits in your offer.
Refine your audience. Tailor your copy, images and call-to-action to the audience you’ve selected and ensure that your audience has the desire and means to act.
Lead Conversion Too Low
If leads aren’t converting at 20 percent or more, either the promise made by your ad isn’t congruent with your landing page, or the process of moving forward is too difficult. Try using the same image and headline in your ad and reduce the form fields in sign-up forms to the bare minimum. Also try retargeting visitors who don’t sign up with ads stating the benefits of acting now, or with a different offer.
Sales Conversion Too Low
If you’re an Ecommerce brand with sales conversion below 1 percent your shopping cart or sales process may have too much friction. Simplify the sales process to decrease clutter, or increase trust by adding testimonials and trust signals near important calls to action.
Your sales process may need improvement, but that is beyond this article. In the meantime, you can still increase revenue by cross-selling and upselling those who convert. You may also improve client retention with recurring contracts. Yes, that’s why many software companies are switching to cloud-based subscription models.
When used properly, The Guaranteed Growth Formula of CPA < AP makes Facebook Ad marketing an investment, not an expense. Using the formula, the most you should ever risk is a small initial budget to test whether your estimated calculations hold true in practice.
If your net profit is 3X your acquisition cost, your funnel returns $3 for every $1 you invest. Instead of asking “How much should I spend on marketing?” The question becomes, “How much do I want to make?” I’ve built a Facebook Ad Growth Calculator that incorporates the Guaranteed Growth Formula to help execute your growth strategy. Input your revenue goal and it will estimate the Facebook Ad impressions and traffic required to reach it.
This article was originally posted here on Entrepreneur.com.