The marketing you do for your business is an investment. You put in some combination of money, time, and effort and ideally you get back a return of some kind. A good marketing investment is one where the benefits you get in return far outweigh the costs (of money, time, and effort) that “spent” to deploy that marketing in the first place. Your return on investment (ROI) needs to be positive for your marketing to be worthwhile.
Here are 5 laws of marketing to help you improve your marketing ROI.
1. You need to have an accurate measure of what you are spending. Too often, business owners focus on the money they spend on their marketing but ignore the cost of the time and effort they spend. An entrepreneur might unwisely think they are benefiting because they are using a free marketing method when, in fact, they are simply not valuing the amount of time that the free marketing method requires of them.
2. You need to have an accurate idea of your ROI. There are many marketing opportunities out there but the benefit that a business can derive from each one varies wildly. Unfortunately, many marketing channels are chosen not because of their ROI potential but because everyone else is using it. Social media – including Facebook and Twitter – are just the latest in a long line of marketing channels that attract businesses with this “lemming effect”.
3. ROI is not always measured in prospects. Traditionally, marketing success has been measured in some very specific ways, such as: The increase in phone calls or inquiries, the number of new leads, or the increase in clicks to a website. But today’s variety of marketing channels offers several new ways to measure ROI. (Just don’t forget law #2!)
4. Marketing activities should always be done in the context of the sales funnel. With the variety of available marketing opportunities out there, many entrepreneurs can adopt new marketing channels and deploy them quickly then move on to another marketing channel and then another and then another. However, more successful marketing (with lower costs and better ROI) comes from first understanding the business’ sales funnel and then determining which marketing methods fit into the business’ sales funnel. That is a key difference in how marketing is planned and deployed.
5. All marketing is a test. The creation of a marketing effort (i.e. a website or a television commercial or even an article on an article website) has two functions – first, it needs to deliver the desired return; second, it needs to act as a test that informs the business owner about future marketing efforts. Where possible, marketing should be split-tested and the information used to determine the best ROI. Even where split testing is not possible, marketing can still provide a lesson for future marketing efforts.
Your business relies on marketing to run and grow. But not all marketing is created equal. Some marketing is costly (in ways you weren’t expecting), some marketing provides little or no ROI, and isn’t always easily measured in the way you expect to measure it. All marketing needs to work with all of your other efforts in your sales funnel, and you should never ever stop testing your marketing to improve its results.