How to make sure your promotion dollars are getting a return
Often, small business owners allocate a total gross percentage of their revenue to their “marketing” budget. I often hear anywhere between 10 to 30 percent that’s “invested” back into promotional activities with the goal of attracting more prospects, generating more referrals and closing more business. But when asking the follow-up questions “What’s your return on that investment?” or “What’s your most successful marketing strategy?”, advisors often don’t have the answer.
Think of it by the numbers. If your firm grosses $1,000,000 annually, and you reinvest $300,000 back into your marketing over 10 different strategies, and as a result, you consistently grow your firm by 10 percent each year. Sounds like a success, right? What if only five of those strategies are producing the majority of the growth? Then a lot of money is going down the proverbial drain. Now that’s scary! Just imagine if you had doubled down on the efforts that were actually producing results… or were able to cut your budget by half and still maintain the year-over-year growth. That’s another $150,000 in your pocket this year!
With the onset of modern technology, monitoring the results of your marketing dollars is easier than ever before. While different strategies may have different objectives, new strategies or strategies that don’t produce consistent, desirable results need to be reviewed regularly, refined if needed, and ultimately replaced if they’re not living up to your expectations.
Here are some guidelines for helping you determine if where that marketing dollar is spent is a “trick” or a treat.
- What’s the point? Marketing typically serves as a branding activity, or a lead generation activity, with the branding designed to make lead generation initiatives more impactful. Review your current marketing mix and decide the point of each initiative. Some may use digital marketing to grow their database, and if that’s the point, and it’s working, then consider it successful. Others may use public relations to grow their brand visibility and credibility, using those media mentions to make all other lead generation initiatives more successful. While others are simply spending money to generate an immediate opportunity like public workshops or college planning courses. Review your mix, determine the point, and begin to assess if it’s meeting your objectives, or falling short.
- Monitor your activities. If you don’t already, I can’t stress it enough… track, track, track. “How did you hear about us?” or “To whom can I thank for this introduction?” are good questions to ask upon first encounters with new prospects who may not have come in through your traditional lead generation initiatives, and then have your team manually track those in the CRM. Otherwise, technology also allows for you to monitor who contacts you from which initiatives. Custom landing pages for each initiative, registration codes for events, email opens or click-throughs, social media engagement and similar are all very trackable. Be sure you have the appropriate CRM or marketing solution in place where these lead sources are automatically added. This way, you, or your staff, can easily identify what’s producing the greatest return on your lead generation activities.
- Attract but repel. Effective marketing is not solely about quantity but quality. Time and again I see advisors tapping into some lead generation initiatives that attract just as many unqualified prospects as it does qualified. If you have a minimum, exclusively serve a niche or have a defined unique specialty, don’t go beyond this framework for the mere sake of making the phone ring. If you don’t sell pet insurance, don’t let your local media station ask you to come on a news program to discuss the best way for a viewer to buy it. It will attract and repel, but not in the way you intended. Spend your dollars to get in front of the right people with the right message.
- Assess. Refine. Repeat. At the end of each marketing campaign, analyze the leads generated for the dollars spent, and assess if it a) met your point and, b) attracted the right types of prospects. Some campaigns or initiatives are over a six-week course, others may take a full year to get accurate results. You need to look at each separately as the timeframe comes to an end. Some strategies may simply require refinement, whether a different message or distribution method (think college courses and the take-away message from the course; the time, date or location; a new list to market; a stronger online presence, etc.) Other efforts may be best to abandon all together (possibly Social Security workshop that attracted community members who are solely relying on Social Security in retirement and wouldn’t benefit from your financial planning services otherwise.) And others, such as branding initiatives, may need to simply be leveraged further to maximize the results (think PR and the need to leverage success on a website, social media, in a bio, through other lead generation initiatives, and similar.) Then, each year review the marketing mix in its entirety to analyze, assess and realign how your dollar are being spent. For more on the importance of diversification in your marketing mix, read our past blog “Understanding Owned, Earned & Paid Content”
An analytical and structured approach to “reinvesting” in your business is going to help you spend your time and money more effectively and grow your business more efficiently. Don’t be tricked into making bad marketing decisions; give yourself the treat of better data to make better decisions, and spend less to grow more!
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