Most of us are searching for ways to improve marketing ROI – but many of us are looking at ways to spend less rather than sell more!
When asked to increase their Marketing ROI, they tend to understand it as cost cutting through better economies of scale or negotiations with their third-party partners and agencies, instead of top-line growth generation: more revenue, more sales, more prospects, more buyers (73%).Source: Downloaded from http://www.newmediaandmarketing.com/there-is-no-social-media-silver-roi-bullet/ on October 9, 2014.
Now, I am all for lowering expenses when it makes sense but since our job is really about generating more revenue, let’s take a look at some ways we can sell more.
Better Targeting. This one goes a couple of ways. First, targeting of potential new or first time customers and, second, targeting existing customers in order to increase order frequency, order size and lifetime value.
When targeting potential new or first time customers, one of the most effective tactics I use with clients is data analysis. Start off by identifying your ‘best’ customers over the past [ex] 12 months – those that have generated the most revenue and/or profits. If your audience is consumer, get that data to Experian or Claritas and have them append data to your list in order to identify segments. Then use their database to identify non-customers that are most like your best customers – and develop a campaign to reach them.
And if your audience is business, check out D&B so you can get some insight into the firmographics of your best customers. In this scenario, you would want to develop a campaign to reach the buyer(s) and user(s) of your offering in order to motivate them to buy from your business.
Now, in both of these examples, you are focusing on those most like your best customers – so it would help if you really understood why your current best customers selected you and keep coming back because that will help you with the messaging and offers for your targeted campaigns.
I also mentioned targeting existing customers in order to motivate additional sales – and this is a strategy that is all too often overlooked by marketing departments because they get locked on to “lead generation”. That leads to a scenario where sales is left on its own to manage the relationship with their own clients in order to “grow the business” and that’s not a terrible approach but it can be an approach that leaves a lot of money on the table.
This approach is a favorite of mine when the client, typically near the end of the quarter or fiscal year, is focused on generating quick sales. You know that your lead time for non-customers is a long one because they need to get to know you, evaluate you and determine if they want to start buying from you. But with existing customers, most of that work has already been done so you should see a shorter buying process on repeat purchases.
What you need is a strategy for selling your customers again and again – and that might be replenishing their stock (consumable goods) or up-selling them to the “bigger, better” higher end option or cross-selling them with other products.
For example, Company A bought printers from your business. You can sell them toner and paper. You can sell them bigger, faster printers to replace what they originally purchased. Or you can sell them other technology like tablets, laptops and desktops.
The key to your success is knowing the customer and making sure you come up with “…the right message and offer at the right time…” Which means don’t sell them Printer A today and start pushing Printer Z tomorrow…instead, focus on the paper and toner. Then, in 6-12 months, start promoting Printer Z. And in the mean time, start talking to them about serving their ‘other technology needs’.
Stronger Messaging and Offers. Are you testing messaging and offers? Do you have something better than “25% off”?
Let me share a story about a sports apparel firm I worked with a while back. They manufactured apparel for cyclists and triathletes and one of their target audiences was independent cycling shops. These are the local bike stores that are typically owned and operated by a cycling enthusiast that really loves bikes and doesn’t know a lot of apparel.
And our competition was constantly offering them limited time savings – buy now, save 25% – and the store owners were getting rather bored by that.
So we offered them something unique. First, we offered them packages that included display racks, signage, product information sheets as well as a selection of our top selling products. Second, we priced it so they could see higher profit margins from our products versus the competition. And third, we offered them valuable incentives for total annual purchases – for example, in-store visits from the athletes we sponsored or free tickets to various events of interest.
What this did was help them with a problem – merchandising the floor – and provide them with incentives to buy more in order to make more money (profit margins) and get some valuable prizes/rewards that they could use to generate more traffic to their stores.
The results? Well, within 12 months, my client had increased revenue by 300% and signed on more than 300 cycling shops as part of their Dealer Program.
So what do you think? Rather than focusing on how to generate more leads at a lower cost, what about focusing on higher conversion rates with better targeting? Or motivating current customers to increase order frequency and lifetime value? And how about some stronger offers that can motivate more buyers to spend more? Anything in here that might help you increase revenue and marketing ROI?