How do I know which elements of my marketing activity are working?
Ideally, the way to evaluate marketing success is to test and measure. However, as a small business owner you will probably find that it appears all of the marketing strategies you try will appear not work the first time. In other words, it’s possible for you to spend money on marketing without seeing any measurable returns.
But when you think about it – you’ve probably been testing and measuring all your business life. Remember the newspaper advertising you tried that ‘didn’t work’, and the radio spots that ‘did OK’.
That’s all testing is… Testing what works and what doesn’t.
If you want to do it properly, here are six ways to help you identify which marketing strategy ‘works’ and which doesn’t.
1.Start asking people where they heard about you.
Start right NOW – immediately. If there’s one thing I stress to business owners when coaching them, it’s this – if you don’t know what’s working and what’s not, you can’t possibly make informed decisions about which, if any, advertisements to run. You may keep running an advertisement that never brings a sale, and accidentally kill a good one.
Customers usually come from so many sources, it’s impossible to judge how an advertisement is working by just looking at your on sales alone. You need to find out for sure. Create a record sheet that lists all the ways that a new customer could have heard about you – newspaper advertisements, direct mail, flyers, phone directory, referrals etc
Every time someone buys, ask them this question – “By the way, can I just ask where you heard about my business?’.
Make a mark on your record sheet in the relevant column. Keep track, and make sure that every member of your team does the same. At the end of every fortnight or month, add up the figures – and you are well on your way to begin making informed decisions.
2.Prune, modify and increase.
The first thing to do is see what’s not working. If a particular advertisement is getting a very low response (and the profit margin from any sales that have been made does not at least pay for the ad), kill it straight away.
Now you only have one option – improve your advertisement to ensure you get a great response.
There’s a couple of things you can do to make the task simpler.
First, go back over your past advertisements and think about how well each one worked. Pull out the best couple and see if you can work out what gave them their edge. Learn from reading the right books on advertising that works. Also look at what your competitors are doing. Do they have an advertisement that they run every week? What can you learn from it?
Go through this process with each item of marketing material that you are currently using. Examine, prune, modify… examine, prune, modify… Remember – the true test of a marketing strategy is whether it pays for itself. If you run an advertisement and it costs you £400 and makes you £1,700 in profit, then it’s working!
Also run through each of the activities you know are working and examine why these are producing results while the others aren’t. Think of a way to use each activity that is working on a larger scale. If it’s flyers, the answer is simple – drop twice as many fliers. That should bring twice the sales. If it’s an advertisement, run it in more papers, or increase its size. If it’s in a phone directory, book a bigger space next time.
But whatever you do, don’t meddle with the creative – just do the same thing on a larger scale.
3.Test and measure for another two weeks.
Measure the enquiries generated from the new and revised activities and compare this with how much you have spent on marketing.
You’ll probably find you will barely miss those poor performing activities and the reinvestment in the ‘larger scale’ activities should be paying off. If not, return to the original budget.
4.Check your conversion.
Conversion is the number of enquiries that become sales. So many times when analysing a business, I discover that poor marketing is not the problem – it’s inadequate selling. There are stacks of businesses that have ample leads, but no skill to convert them into sales.
Be honest with yourself – how many leads do you convert into sales? Is it possible to increase this ratio, even just a little? In almost every case, it is.
You just have to give the customer a reason to buy from your business. The lowest price is not always the reason. Customers like to buy from companies that have salespeople who take an interest in their needs and are that little bit friendlier. They like companies who are willing to back their product with a guarantee and offer free delivery. All of these can tip sales your way.
Leave it for a month or so, just working on converting the supply of leads you have. A better conversion technique, plus more leads from bigger scale successful marketing activities should give your business a boost.
Remember all those marketing activities you examined and modified? Now is the time to pull them out of the drawer, and give them a run.
Do one at a time, and track the results meticulously. Note down exactly how many leads each brings you, and how many of those turn into sales. Compare that with the marketing cost, and judge whether each has been worthwhile.
If so, add it to your portfolio of ongoing activities. If not, try it again – testing a different headline, medium, offer, look etc. If it doesn’t work again, give it another try.
By following the six steps, you’ll develop a collection of marketing activities that work, and weed out all the costly ones that don’t. Now that’s a formula for business success!