Increasing Your Marketing ROI
by Russ Dalbey
ROI, or “Return On Investment,” is a key financial measurement that correlates
the cost of business expenditures to their actual value in the “real world.”
Generally, ROI is expressed as a percentage, or the ratio of net benefits over
costs. This is a common formula for Return On Investment:
ROI = [(Documented Monetary Benefit - Cost of Marketing) / Cost of Marketing] x
100
Let’s look at a simple example. Let’s assume a six-month marketing campaign cost
$2,000.00, but resulted in $8,000.00 in profit. $8,000.00 - $2,000.00 =
$6,000.00. $6,000.00 divided by $2,000.00 is 3, which calculates to a 300% ROI
after multiplying it by 100.
The lower the cost and the higher the benefits, the larger your ROI percentage
will be, which – all else being equal – is better of course. Enough with the
math! The most important thing for every business owner – from a one-person LLC
to the board of directors for a monster corporation – is maximum return for
every dollar invested in marketing.
Here are the best ways to ensure that your advertising, marketing, and sales
techniques are giving you the best “bang for the buck.” After all, you are in
business to make money, right?
Plan and Consider Carefully for Best Marketing Results (Be Smart!)
Perhaps you already know that in order to achieve success, you must have both a
direction and a way to get there. Business planning is as important as
conducting business. But, many business owners do neglect to sit down and create
an action plan for making the most out of their efforts. And even more do write
out a plan, but not one specific enough. Or they don’t follow through or hold
themselves accountable to it.
"S.M.A.R.T." stands for Specific, Measurable, Actionable, Realistic, and Timely.
These are descriptors for any targets that you set for your marketing efforts.
Meeting just one or two of these requirements isn’t tough. But making sure your
proposed benchmarks meet all five terms of “SMART” goal setting is a little more
involved. In other words, it’s not much use to say “I will raise net revenue by
20%” if you don’t have any vision on how you will achieve this, how long it
should take to meet this mark, or if your company is currently having trouble
making a profit. Also, there’s no “F” in “smart,” but if there was, it should
stand for “Flexible.” The business world moves fast, and you must be quick on
your feet to keep up. There’s no point in sticking to outdated business plans if
you’re faced with new information that necessitates a change in direction. Don’t
be afraid to modify your path along the way if all signs point to the fact that
it’s the best course of action.
Consider Migrating to Lower-Cost Advertisement Formats
If you’re looking to boost your income while keeping your marketing costs
constant, it makes sense to explore options with cheaper forms of marketing. Are
you currently putting a lot of money into a yellow pages ad, radio spot, or
newspaper print ads? There’s a chance that you might be able to find a better
way to bring customers to you.
Big yellow page ads work well for certain types of “gotta find someone now”
businesses, such as plumbers, lawyers or car repair shops. It isn’t necessarily
the best way to attract new customers for other types of businesses. Moving the
costs of a phone directory listing to an unconventional advertising method could
make a noticeable improvement in your bottom line (see tip #8 below). The cost
of large print ads in newspapers or other periodicals really adds up over time.
Explore the advertising rates of competing publications. You might even be able
to negotiate a better price with your existing ad agent if you know that the
rates of another paper with similar circulation and demographics are lower.
If you’re currently mailing out flyers, letters, or other complex advertising
pieces, consider switching to postcards. Postcards have lower postage rates and
have a surprisingly high readership (there’s no effort involved with opening an
envelope, and the small size keeps the message short and sweet). Post cards can
be extremely effective to promote new products or specials, offer discounts or
coupons, generate website traffic and new leads, or send a follow up message to
an existing customer.
Make Sure Your CTA is the Best It Can Be
This is especially important for direct mail, print ads, or online advertising,
but the concept is critical for all forms of marketing. The CTA – “call to
action” – is arguably the most critical part of your marketing pitch, because
this is what actually directs your potential customer to take the intended
action – whatever that may be. A poorly thought-out or poorly worded CTA can
actually turn off your customer and “lose them,” even if the rest of your
advertising piece is successful. Identify with your customers and their mindset
when they’re thinking about committing. Write the CTA so that what you’re
telling them to do is the most appropriate and logical response to the problem
your product addresses. Be the voice inside their head. Make sure the CTA is
clear and action-oriented! This is the worst possible time to confuse your
customers and raise questions in their minds – or give them the impression that
it’s OK to “sleep on it.” Also, make sure it is easy to follow your recommended
course of action. If you’re telling them to “call or go online now to reserve
your seat,” make sure the phone number and website address is right there.
Improve Your Print Copy
It should be obvious that any marketing materials should be clear, powerful, and
100% free from typos and grammatical errors. Yes, details do matter. Judging by
the technical problems found in many small business’ websites and advertising
materials, many businesses apparently still haven’t realized this. Don’t just
use an electronic spell check – many word substitutions won’t be caught (such as
using “your” instead of “you’re”). After you’ve checked it yourself repeatedly
and think it’s perfect, run it past some friends and family and tell them you’ll
give them a dollar for every legitimate error they find. That will give them
some real incentive! Your copy has to do more than just “sell” by hyping
features and benefits. In fact, leading off with a headline that touts how
amazing and wonderful your product is might have the opposite effect and
instantly turn off the reader. If you use a headline or sub-headline, remember
that the purpose is only to grab the reader’s attention and compel him to keep
reading – not to deliver information.
Once you have succeeded to at least getting your potential client to continue
scanning your text, the following copy must make some kind of emotional
connection with your prospect. Otherwise, the customer’s sales resistance stays
up, and so do the odds that your message is headed to the garbage can soon. You
might consider starting off with a story or anecdote that seems to have nothing
to do with what you’re pitching. An involving story (one with people or animals
in it) sucks your reader in and makes him forget that he’s reading an
advertisement. It also plays to the most powerful part of the consumer
decision-making part of the brain – the emotional part (see # 6). Make sure
whatever you’ve written isn’t too long. Again, try it out on acquaintances and
get their input. Ask them how it makes them feel, or if they got bored or easily
distracted while reading it. Ask them if they came up with any objections to
performing the call to action. What do they think about the company behind the
ad after reading your piece?
Perform More Follow-up on Every “Live” Lead
In a perfect world, everyone who received your marketing message would
immediately respond and become a loyal customer for life. In reality, this isn’t
the case. A certain percentage of those who get your “pitch” will ignore it or
never follow through on the call to action. Depending on your advertising method
and your product, it might be the large majority of your target market. So, it
stands to reason that those who do make the call, visit, or click to get more
information or the free introductory offer should be regarded as a great
potential source of income. Don’t make the mistake of letting a qualified lead
go to waste. Polite and personalized follow-ups after a prospect contacts you
can win a prospective client over and prevent losing their business to a
competitor.
Focus Your Efforts on Understanding and Targeting the Emotional Reasons that
Drive Your Customers
We’d all like to think of ourselves as highly rational and intelligent beings.
But . . . the fact remains that it’s our emotional side that often spurs us into
action. Design your marketing to invoke your target customer’s emotions. Firing
up feelings of desire, curiosity, hope, fear, surprise, respect, humor, or even
anger can make your message (or what you want them to do - #3 from above) that
much more powerful and memorable. Rational arguments will help your prospect to
convince himself that all of your information is logical and reasonable. It will
help him to remain convinced that he made the right decision after the sale is
made. But the triggers that keep a person reading before they’re “sold” and
compel the reader towards the purchase decision are almost always emotional.
The best thing is to paint a picture your customers can completely empathize
with, voices their true desires for them, and allows them to completely realize
their frustration or dissatisfaction with their current situation. Then make the
offer of the perfect solution – but only after those pre-conditions are
satisfied. When you correctly identify the driving emotions behind your
customers’ decision-making process, you’ll convert more prospects to clients.
Even better, you’ll also build a stronger perceived value for your service or
product, which means you’ll be able to convert more customers at a higher price,
or rely less on discounting to close sales.
Follow Industry Trends and Monitor the Competition
There’s nothing wrong with keeping up with what other businesses in your field
are up to. In fact, it’s part of your job as a smart businessperson! Always
monitor your competitors’ advertising, and check out their stores and product
selection. If you don’t have time or the inclination, you can pay for the
information by hiring a competitive intelligence (CI) firm to find out for you.
By learning about your direct competition and researching the history and past
actions of its management, you will be more likely to anticipate their next
move. You can even take cues from companies in other industries or large
corporations that aren’t your competition. Changes in the big market caused by
trends such as rising oil prices, the ever-expanding online markets, or the
spread of smoking bans across the country might mean something for you in your
neck of the woods.
Consider Unconventional Marketing Techniques
There’s more you can do than print, direct mail, web, and phone directory
advertising. Today, you can put your business name and contact information
almost anywhere – on the back of a cab, on the side of a bus, on a bus station
bench, in a restaurant bathroom. All of these could be a low-cost way to boost
your return on investment figure. Don’t neglect to think outside of the box.
Contemplate who your customers are, where they are, and what you could easily do
to make a meaningful, positive impact.
Sponsor a local youth athletic league if your target market is composed of
parents or baby boomers. Volunteer your services or products for a fundraiser
raffle. Do an inexpensive “thank you” gift basket to remind your top repeat
customers that you appreciate their patronage. If your business is a restaurant
in a busy area dominated by offices and other businesses, bring a sample tray
and menus to their locations – just before lunchtime. If your clients are
typically web-savvy and a specialized niche, find the top online discussion
forums or chat boards that focus on your topics relevant to your business. Find
out what pay-per-click advertising on these websites might cost, or if you have
more time than money, create an online user ID and participate in the discussion
threads as a “resident expert.” Most online forums are free to join.
Just make sure your posts are informative, unbiased and impartial. Don’t openly
advertise your business, but always include a link to your company website (or
at least your business contact information) at the bottom of every post. Soon,
the others on these forums – your ideal target customers – will recognize your
expertise and flock to you, even though you never directly asked for their
business.
Listen to Your Customers (or Customers you Lost)
Survey them for how they feel your representatives, your products and your
services performed. Ask them how you can improve, or why they chose a competitor
instead. Offer a discount coupon for future purchases or a chance to win a
randomly selected prize (DO make good on the offer after you’ve completed your
market study) as an incentive to bring in replies. You’ll need answers to
specific questions in order to get good information out of your survey, such as
“which of the following reasons was the biggest factor in choosing my company?”
But, give your customers the opportunity to speak their minds without prompting
as well. You should also ask this question:
“What product or service that I don’t currently offer would you be interested
in?”
You just might discover a niche customer or product that could be your real
“cash cow.”
Initiate, Revamp, or Improve Your Online Presence and Marketing
If you don’t have a website, you should. After all, if you’re reading this
article, you must be fully aware of how you can find almost anything you’re
seeking – information or products – via the Internet. Millions of others like
you know this, and more and more people are realizing this truth every day.
Many businesses make the mistake of throwing up a website, and then doing
nothing to keep it current or improve it. An outdated or unprofessional-looking
website will scare away more customers than you imagine. Ideally, your website
should provide anything your customer would like it to do – give more
information, provide a variety of pictures of your products and services, and
give them the means to contact you, easily find your physical location, or place
an order online. Your website’s attractiveness, layout and ease of operation are
critical as well. Internet customers are typically impatient. If they can’t
figure out how to get what they want out of your website in the first ten
seconds, the odds are good that they will move on, seeking what they could have
purchased from you from another merchant.
Finally, optimizing your website’s content for search engine optimization can
have a huge impact on your overall visibility on the World Wide Web. Do the
research to find out how to do it yourself, or pay someone to do it for you.
Either way, it will be well worth the time or money spent.
Bio:
As the CEO and founder of The Dalbey Wealth Institute, Russ Dalbey has authored
dozens of best-selling books and articles on the cash flow business. A highly
sought-after public speaker on the topics of wealth, success, and personal
motivation, he also holds a record in The Guinness Book of World Records for
cycling.
Russ is considered the premier authority on making money in the cash flow note
business. Russ Dalbey has been teaching his moneymaking method now for almost
two decades, and is considered among the leading educators and experts in the
cash flow note field today. Russ Dalbey is truly delighted to bring his vision,
experience, knowledge, and energy to anyone who is just discovering the note
business for the first time – people who are looking for a better way to live
and love life.