You must, must, must measure your results

This client was fantastic at working with us to establish their return on their marketing investment. They shared information that enabled us to help them establish which clients they’d gained as a result of their marketing efforts, and then to calculate how much those clients have spent so far. 

It’s important to analyse those figures correctly

If you have profitable sources of new business, why turn off the tap in one area? As long as each lead generation effort makes you money, have as many fingers in as many pies as possible – especially when, as in this case, someone else is doing all the work and all you need to do is pick up the phone and take the money. In this instance, the client was looking at how much each new client cost and comparing it to the cost of new clients they gained through Google. What they haven’t done is wait long enough to see how much the clients from different sources spend. We know that the clients we generated are spending around £300 each year, with a lifetime value in excess of £3,000. A good friend’s business went bust some 20 or 30 years ago when they ran tests in different national newspapers. The Sun generated a far greater response than any of the other papers, so they cancelled all their other advertising and ploughed all of their money into advertising there. What they failed to realise was that the people who responded to an advertisement in The Sun didn’t convert, i.e they didn’t spend any money.

All the data was there – they just interpreted it in the wrong way, and it cost them dearly. The same rules apply now, and across all media. Do you want lots of clients with a low cost per acquisition, or do you want clients that spend lots of money? They might not all come from the same place so proceed with caution before you make too many assumptions about what the data is telling you.

If your marketing is working, why change it?

How many times have you stopped doing something because you’re bored of it? Your prospect has probably never seen it before, and for them it might be extremely relevant and perfectly timed – but you’ve seen it over and over and you think it’s time for a change. Bad move. If it’s working, and it’s making you money – keep doing it. This is not an excuse for becoming lazy. You should always try and improve on your response rates through testing, but that’s different to ditching a whole campaign simply because it’s a new quarter / season / year and your boss expects you to run something new.

For those of you that think you can’t afford to test / measure – you’re wrong

If you don’t at the very least measure your response to your marketing efforts, how on earth are you ever going to know whether to repeat something, or stop it? I spoke to one client this week who paid another company quite a lot of money to insert 30,000 generic leaflets into a pack with lots of other generic leaflets and was disappointed to have not had a better response. His product is fantastic and he’s leagues ahead of his competition in the way he goes about his business – but you’d have to be a mind-reader to glean any of that from the leaflet he sent out. He’d be infinitely better off sending a smaller, targeted pack to his prospects and explaining to them why his product would be good for them. It’s possible he’d spend more in the short run, but I’ve no doubt the response would more than justify the extra time and effort.