Are you fed up of just drifting on the tide?

If you look on the bridge of any modern ship, you will find a whole array of instruments designed to produce metrics that are critical to the safe navigation of the vessel. Would you board a ship if these instruments were not working and the crew was unable to gather this vital information?

I’m going to guess that you said no because apart from the safety aspect it would be highly unlikely that you would reach your intended destination. You would end up drifting along at the mercy of the tides, winds and surrounding environment. To do that would be a little crazy wouldn’t it?

Yet in business many companies invest vast amounts of money into sales and marketing strategies with no clear metrics in place that will give an indicator of how that investment is working or, indeed, not working.

Most companies recognise the need for metrics, yet they tend to be “one of those things we will get round to one day” because the busyness of business takes over. This is a little like being the Captain of your ship; down in the engine room, shovelling coal “got to keep the ship moving,” but never getting up onto the bridge to actually see  what direction you are actually going!

What metrics can tell us and why there are so important?

Take a trip to the doctors when you’re feeling unwell and three things the doctor might take a look at are; temperature, blood pressure, and pulse. If your temperature is 98.6 its normal, blood pressure is 120/80 that’s normal and a pulse of 65 would be considered normal. Differences in these numbers would indicate areas that might need further investigation.
On our ship the captain will be able to tell he is heading in the right direction, by the readings from his rudder angle indicator, gyrocompass, he can also make sure he is moving at the correct speed by checking his GPS system or by using a Doppler measurement.
In business, there are numerous indicators we could look at in marketing including; return on investment (ROI), customer retention, average sales value, leads generated, conversion rate, frequency of transactions, lifetime value…..

What can you do with the information?

Let’s say for instance your business is measuring customer retention, and you discover that your retention rate is 65%. This means that to maintain your customer base you will have to generate 35% new customers every year. It has been estimated that to acquire a new customer can be between 5 and 10 times more expensive than retaining a current customer. Armed with this information you now have choices: you can spend more money on generating 35% new customers, you can look at implementing strategies (at a lower cost) aimed at keeping the customers you already have or you could have a combination of the two.

It is quite frightening to think that because most businesses do not track customer retention; they will normally revert to spending money on generating new customers never realising the effect that has on profits.

What should you be measuring?

I would suggest that you use your intuition and focus on implementing marketing metrics that are specific to your business operations. As a starting point, you might want to look at profitability metrics; after all, you are in business to make a profit. Once these metrics are up and running smoothly you can move onto some more complex measurements which will reveal even more profit building opportunities for your business.

It is worth pointing out that it is not the number of marketing metrics that you use, but the effectiveness of those you do choose to apply across your business.

HOW TO HIT THE TARGET

A question I get asked by many business owners is what is the most important factor when it comes to marketing my business? Is it my offer? Is it my unique selling proposition? Is it whether I market online or offline? Is it how quirky I make my marketing? Is it how my marketing looks?

Actually, whilst all of these will help the key to making marketing work for you is to target the market you are aiming to sell to. Now you may be thinking “but everybody can use my product or service” and although that may be correct you are forgetting one key point; everybody buys from you for a different reason, so how do you expect to appeal to all of your potential customers at the same time?

One of the main reasons business owners learn to think like this is because it is the way we are marketed to most of the time. We are constantly bombarded with marketing from some of the biggest companies in the world such as Apple and HP. They are well known brands and have huge marketing budgets so that they can sell to millions of people and they need to keep their brand name in front of their customers.

Brand marketing does work but it is very expensive and well beyond the marketing budget of most in the SME market.

So what does work?

Consider if you only had one product/service and this appealed to only one type of customer, how much easier would your marketing be? You would be able to extol the full benefits and uniqueness of your product and your customer would understand this and be much more likely to buy from you because you will have forged a very specific connection with them.

So this is the secret of proper target marketing, but like most things in life, it may be simple yet not necessarily easy.

If you have numerous products/services and customers of all shapes and sizes on your database how do you choose who to target?

If you were to review your present customer base I am sure you will find some really awesome customers that buy from you more than average are a pleasure to serve and never quibble on price (they do exist!). You will also have customers that could be classed as ‘bread and butter’ or basic type of customer who are just good solid business. Then you might have a group that you would be a darn site happier if they were customers for one of your competitors because they are hard work, rarely spend much and when they do always find something to complain about. We call this your customer ABC – A is awesome, B is basic, C is can’t deal with.

Now you don’t need to be a marketing guru to realise that it would be better for your marketing  to attract more A type customers than B’s and C’s. If you agree with this it may a good time to identify what exactly make an A grade customer in your business. This can include factors such as location, demographic, what they buy, what they spend, profit per sale, how quickly they pay etc. Once you have identified who these A graders are it could also be an opportunity to reach out to them and find out what it is about you that they like, and you can use that feedback as the basis for discovering your USP.

Once you know who you’re ‘A’ grade clients are, your job is now to go out and find more of them this will then become the basis of your marketing campaign.

There are many ways to do this yet this has to be the simplest method I have found is:

Who do you want to target? – Which of course you have now identified and are being really specific!

What do they want? – Which product or service are they going to be interested in?

Where do you find them? – Think differently here where do they hang out? What magazines do they read?  What trade journals will they read, what industry bodies do they belong too? Who could you possibly form a strategic alliance with that is already dealing with these people?

When will they be looking? – When it comes to marketing, both timing and consistency are critical. So when do you intend to start marketing your product/service? How long do you intend your campaign to last? It has been estimated that it takes at least 7 touches before somebody is prepared to buy from you so it is important to plan the intervals and types of touches you intend give.

General rule of thumb erratic marketing = erratic results, consistent marketing = consistent results!

Why should they take action? – You must have a compelling offer that will make them take action now, even if that is just register interest and allow you to contact them again in the future.

How are you going to communicate to them? – What medium will you choose? Paper, letter, magazine, telephone etc. If you know your target this will be obvious.

When doing this, think of picking off your future customers one by one with clear a specific message that will make them react immediately, rather than hitting everybody with a weak and confusing message.

So now you know how to hit the target every time. But just like any great darts player you may not hit the bullseye every time but you will have another turn and the more you throw the better you get.

Is it time for you to step up to the oche and take action?

If you are a business ownerand don’t consider yourself to be a marketer this may be of interest to you