In today’s economic climate, where money is increasingly expensive and business mindsets are pivoting from “growth at all costs” to “cost-efficiency,” reevaluating what truly matters in marketing is more important than ever. In this context, the age-old adage of “efficiency” and “effectiveness” in digital marketing becomes crucially relevant.
Effective marketing – doing the right things
Effective marketing is about achieving the most meaningful objectives for your business. Many companies make the mistake of either setting up too many goals, focusing on the wrong metrics or doing too many things at the same time. In the most essential terms, there is one overarching goal your marketing should aim for: increasing revenue at the lowest possible cost. This sounds easy but is hard to achieve in practice. However, making sure your marketing aims at one of the below goals is critical.
- Depth: Encouraging customers to buy at a higher price or a wider range of products
- Frequency: Getting new and existing customers to make purchases more often.
- Word of Mouth: Having customers recommend your brand, thus driving new customers to your business.
Multiple studies have shown that focusing on market generation by building “mental” and “physical” availability of a brand is the best way to grow a brand. Your marketing should always strive towards attracting new potential customers and not only encourage existing ones to buy more.
The Metrics Mirage
The advent of Google Analytics and sophisticated metrics on advertising platforms has led to a hyper-focus on digital tactics like cost-per-clicks, cost-per-lead, and social media engagement rates. While these can be valuable, they often divert attention from long-term objectives like building brand salience and awareness (mental availability).
Simply put, while these digital metrics are easier to track, they must impact one of the three goals mentioned above to be truly valuable. Focusing solely on short-term digital KPIs can be a pitfall; it neglects the long-term strategy necessary for creating “mental availability” with consumers.
How to strike a balance between efficiency and effectiveness
While cost-cutting is important, it should never come at the expense of effectiveness. Here are some balanced advice to maintain both:
- Prioritize High-ROI Activities first
Focus your investment in marketing channels and activities that offer the highest return on investment (ROI) before exploring other options. While this may sound like common sense, it’s surprising how many businesses direct traffic to underperforming websites and landing pages. Not only does this fail to drive new sales, but it can also tarnish your brand’s reputation.
When assessing ROI, it’s crucial to allocate sufficient time to accurately measure the revenue generated. Additionally, your calculations should encompass not just media spend but also external production costs and the internal time invested. This is particularly relevant for social media marketing, where we often see companies dedicating excessive internal resources without ensuring that their efforts yield the necessary reach to justify the time spent.
- Dare to be channel agnostic
Marketing is not only about following the latest trends or simply buying PPC traffic at high-cost keywords. Too many companies tend to overspend their media budgets on PPC and under-spend on print, radio, banners and other reach and brand awareness activities. Make your own assessment and dare to test. E.g. print advertising or direct mail can be great for generating cost-efficient reach if the price is right.
- Use the right technologies, not all technologies
There is a jungle of digital marketing tools out there. Be sure to use the ones that actually save your time and not steal your time or sacrifice output quality. Tools that can automate repetitive tasks without compromising on effectiveness can be a win-win. Tools that help your team collaborate better can be a win. A word of advice – use fewer tools, but use them well instead.
- Track the Right Metrics
Rather than tracking every possible metric, focus on those directly related to your primary marketing goals. Streamline your analytics to align with these objectives. Some of our favourite metrics include Customer Lifetime value, Cost per sale/lead/meeting, and channel growth/composition.
- Don’t forget the long-term brand-building
While it may be tempting to focus solely on immediate metrics, remember the importance of long-term brand building. A strong brand invariably leads to customer loyalty, which is a pathway to sustained revenue and lower customer acquisition costs.
- Focus your efforts
You can’t do everything at the same time. To get an impact in today’s crowded marketing landscape, your marketing needs to be of the highest quality. Make sure to prioritize your scarce resources and focus on what matters most.
- Never forget who your customers are
Not many in our field want to admit it, but marketing is in many ways a repetitive process. We say the same things (more or less) over and over again. Why? Because if our customers like it, it would be foolish to change. Don’t change a winning strategy or concept just because you are tired of it yourselves.
Conclusion
Increasing revenue at a low cost is possible but it will require more of your team and company. By maintaining balance and aligning your strategies with the right goals, your marketing efforts will not only stand the test of challenging times but also set you up for sustained success in the future.
