Marketing Buck Bang

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Online marketing is no easy undertaking, and businesses both large and small are faced with the same challenges.

Challenge 1:

Which audience vertical gets what portion of budget allocation?

Attain New Customers

• Set campaign goal
• Outline costs associated with each marketing campaign to be used

Include production costs, labor costs, cost of delivery, research

• Consider multichannel purpose marketing

Link all efforts and leads to your website

Focus marketing at the intended target audience

• Set a realistic cost for your lead acquisitions

If you run only a one-month radio ad that costs $1000 and you’re willing to pay $25 for each lead, your radio ad would need to produce at least 40 leads. To further understand why you need to be realistic, you also need to consider your projected revenue return.  If you’re selling X for $55 and you only have two sale lead purchases out of your 40 leads, your ROI is -89%.

Nurture Existing Customers

• Set campaign goal
• Outline costs associated with each marketing campaign to be used

Include production costs, labor costs, cost of delivery, research

• Think multichannel purpose marketing

Link all efforts and leads to your website

• Use historical data to measure your lead acquisition cost

Adjust benchmark CPA

CPAⅹCPI

Last year’s month to month benchmark lead cost was $1.03/lead.

Adjusting using a CPI of 1.9% = $1.05/lead.

If you run a one-month email campaign that now costs $1000, for 1000 emails, and historical open rate is 70%, with a click thru rate of 75% of which 15% buy, your cost per lead is $1.43.

If you’re selling X for $55, your ROI is 43.38%, which accounts for the rise in lead cost.

Challenge 2:

How do you distribute, and how do you grade?

Cultivate Quantifiable Revenue

• Set your marketing budget as a percentage of your gross revenue, and specify your revenue goals.

2012 Gross Revenue was $250000 and you want to increase by 20%

2013 Gross Revenue goal $300000

Average sale $55

• Number of additional valid purchasing leads necessary to reach goal is 909

Quantify each marketing campaign by audience vertical type

• Apportion budget allocation based on each contributing campaign’s ROI

Example:

250000 ⅹ 9% = $27000 2013 marketing budget

Apportion

• 40% for SEO ecommerce ($10800)

Boosts organic traffic to your online store

⇧New customers

⇧Existing customers

Forwards branding and brand reinforcement

• 20% Search Engine Marketing ($5400)

Take advantage of 1^st and 2^nd tier verticals

⇧New customers

• 30% Email ($81000)

⇧Existing customers

• 10% Offline advertising that drives customers to website ($2700)

⇧New customers

Forwards branding and brand reinforcement

Sounds simple, but the simplicity of the model is not that easy because at risk are businesses over simplifying running costs.

Marketing spend allocation needs to equally measure the perspective by how to maximize a customer’s acquisition equity, which takes into consideration retention along with future sell spend.  For this determines which customer verticals bear equity, and provides measure so that budget allocation is accordingly proportioned.