How to get the most out of your marketing spend
Throwing money at an advertising campaign may result in just that, throwing money away and not getting a return on your investment.
Because too often people confuse advertising with marketing with promotions with sales. They take a shotgun approach to trying to generate new business and fail to understand that for a marketing campaign to be effective, you need to take a targeted approach. Taking a shotgun approach means spreading your marketing dollars all over the place and hope their marketing message sticks. This is what happens when you don’t research and plan your marketing campaigns.
But first, let me introduce you to the marketing bow tie.
The marketing bow tie
The marketing bow tie will help you understand the difference between marketing and advertising and where your customers come from.
The marketing bow tie is made up of seven segments, three on the left, three on the right with your brand and positioning statement sitting in the middle.
On the left hand side of the marketing bow tie is where you conduct your market research and choose the right customers to do business with.
The right hand side of the marketing bow tie is where you create value, acquire new customers and retain your existing customers.
Advertising fits into the right hand side of the marketing bow tie under the segment, communicating value.
Choosing the right customers
Choosing the right customers to do business with is critical to any business. It’s important that the products and services you offer meet the demands of your target market. It defines how, where and when you will compete in the marketplace.
Defining the market
In defining the market, you want to determine the size, growth, trends, competitiveness and attractiveness of the market you intend to operate in or are already operating in. You don’t want to be selling your products and services in a market that is shrinking or non-existent. You can – but that is another strategy altogether and not covered in this post.
For maximum benefit you want to be positioning yourself strategically in the consumer’s mind.
Segmenting the market
The next segment of the marketing bow tie is where you segment the market to further define who you want to do business with. You can’t be all things to all people so you need to examine the market more fully to determine the demographic, psychographic, motivational and behavioral segments of the market. By segmenting the market, it gives you a clearer view of the size, accessibility and needs of your target market.
For instance, lawyers specialize; perhaps in family law, corporate law, environmental law, personal injury law, criminal law and so on. This is known as segmentation. In the hospitality industry there are many ways to segment the market. Tourism operators, travel agents, accommodation providers and food and beverage providers are all possible segments of the hospitality market. If you were to drill further down into the accommodation market, the segments might look like this:
Identifying your target market
Once you have defined and segmented the market, it’s time to narrow down exactly who your target market is. Your target market will also depend on who else is competing in that space and the demand for your products and services. You are looking to identify the market that will be of most strategic value to you.
Using the accommodation segment of the hospitality industry as an example, the customers who are likely to stay in a five-star hotel are completely different from customers who are likely to stay in a backpackers. A five-star hotel is likely to attract business people whereas backpackers are likely to attract students on a budget and of course this research informs your marketing efforts.
Your target market is where you direct your marketing resources and position your brand to achieve a sustainable competitive advantage. You then match the services you offer to your target market and look to satisfy the needs of your potential customers.
In the middle sits your brand and how you position your brand in the market.
Acquiring growing and keeping customers
Unlike the left hand side of the marketing bow tie which is about market research, segmenting and defining your target market, the right hand side of the marketing bow tie is where the value process takes place.
Your value proposition identifies what is unique about your product and service offerings and why prospective customers should do business with you. The right hand side of the marketing bow tie is where you acquire new customers and retain existing customers.
When you think about creating value, think about what products and services you will offer that is closer to your customer’s ideals over your competitors.
Have you heard of the radio station WIIFM – it stands for What’s In It For Me? The customer wants to know if they buy from you, what’s in it for them? What are the benefits they will receive from using your products and services? They are constantly tuned into this radio station looking for the supplier who best matches their needs. So you need an understanding of your customers wants and needs in order to design appropriate marketing strategies that resonate with your target market. This also links back to your brand and how you position yourself in the market.
The middle section on the right hand side of the marketing bow tie is where you communicate value to your target market. Here is where advertising fits into the marketing bow tie. Advertising is only one of many strategies you can use to communicate value. This is where people confuse advertising with marketing. Advertising is only one channel used to communicate value to your target market. Communicating value includes other channels such as your website, social media, advertising, promotions, public relations, touch point marketing, brochures and personal selling including prospecting and networking.
The final segment of the marketing bow tie is how you deliver value. This is the actual delivery of your products and services after the customer has bought from you. Delivering value is about the quality, consistency and sustainability of your business. It encompasses all aspects of customer service, after sales service and the ability to retain your customer’s loyalty.
Many people in business forget to marry all aspects of the marketing bow tie together especially delivering value. There’s no point having the most fantastic product or service in the world if you fail to continue to deliver value in the real world. If you don’t keep your customer base happy, you will lose them to your competitors. Research tells us, that it is six times more expensive to acquire a new customer than to retain an existing one. Having an integrated customer service strategy is just as important as acquiring new customers.
Putting it altogether, you can see that the left hand side of the marketing bow tie is all about choosing the right customers to do business with, where how and when to compete in the market place. The right hand side of the marinating bow tie is where you provide and communicate value to your customers and keep your customers happy.
So how can understanding the marketing bow tie help you get more for your marketing dollars?
Designing a campaign to match your target market
As you can see, throwing money at advertising in the hope that some of it works is not a good marketing strategy. Although it takes time, doing the research on the left hand side of the marketing bow tie, is like putting on a telescopic lens and designing a marketing campaign that will reach your target market. This is important to ensure you are not wasting money on the wrong target market or using a marketing channel to communicate value that doesn’t reach your target market.
When looking to reach your target market, the first thing to do is to create a value proposition. A value proposition is a clear statement of what tangible results a prospective buyer is likely to gain from using your products or services. It’s the promise of what value a prospect will receive if they buy from you.
Prospective customers don’t want your products or services, they want the benefits your products and services provide. Customers don’t buy insurance; they buy peace of mind. Customers don’t buy cosmetics; they buy how the cosmetics makes them feel. Customers don’t buy a website, they buy a powerful communication tool where they can communicate value to their customers and prospective customers. In other words, your products and services will either take away the pain of a problem a customer is feeling or gain the rewards of an opportunity.
Create buyer personas
For your marketing efforts to be most effective, it pays to spend the time to create buyer personas for your target market. A buyer persona is a fictional character that represents your ideal customer either based on market research and/or using real data from your current customer base. These fictional characters or personas, help you to identify and understand who your prospective customers are. They also help you understand if your current customers are right for you for if they are not, you could be sacrificing time and money in all the wrong places.
A buyer persona is not merely a description of your prospective customer, it’s a profile of your ideal customers. A buyer persona gives you insights into what your prospective customers may be thinking or doing and why they should buy from you.
Use the AIDA principle
When designing a marketing campaign, you need to know what your customer’s problems and opportunities are so that you can match the benefits your products and services provide.
Using the AIDA principle, what question could you ask that will attract the attention of your customers. AIDA stands for Attention, Interest, Desire, Action. In other words, you want to gain the attention of your buyer persona with an attention grabbing headline. Secondly, you want to create further interest that relates back to the personas problems or opportunity followed by how your products and services will benefit them. Lastly there must be a strong call to action. What do you want your prospective buyer to do?
- Call you on the phone
- Send you an email
- Visit your website
- Visit your place of business
Choosing the marketing channel
Not all marketing channels will suit different buyer personas. If you are targeting a specific age group, say 16-18 year-olds, you might look at social media to communicate your marketing messages. If you are targeting business to business, you might look at LinkedIn to communicate your marinating message. If you are targeting a more mature demographic, you might choose newspaper advertising or brochures to communicate your message.
The AIDA principle will help and guide you depending on the channel you use and the message you want to relay to your target market.
Measure your marketing efforts
Finally, one of the most important thing to do when embarking on a marketing campaign is to measure the effectiveness of that campaign. You want to gather feedback to measure the return on your investment.
For instance, if you were running an advertisement in the newspaper and your call to action is to call you, try setting up a different phone number from your main line to measure how many inquiries you receive. If you call to action is to go onto your website, you can use google analytic to measure hits on your website around the time your marketing campaign went out.
If you were using Facebook to advertise and get you marketing message out, you can try split testing to see which adverts work better than others. You will also be able to measure the cost of acquiring a new customer.
Regardless of the message and the channel you use, always measure the results to inform future marketing campaigns to ensure you are spending your marketing dollars wisely.
On a final note
Careful planning and preparation will ensure you spend you marketing dollars wisely for a greater return on your investment.
In a Nutshell
- Use the marketing bow tie to understand the difference between advertising and marketing
- Conduct research to choose the right customers to do business with
- Identify your target market and what their problems and opportunities are
- Create a value proposition to inform your marketing messages
- Create buyer personas to identify who your customers are
- Use the AIDA principle to create your marketing messages
- Choose the right channel for each of your buyer personas
- Measure your marketing effectiveness