Strategic Suicide

There is an approach to web marketing which goes like this...

1. Create some content with utility value
2. Give it away for free
3. Attempt to convert these freeloaders into paying customers

On the face of it this marketing tactic seems like a good idea. A web marketer uses the freebie as bait, attracting hoards of people to his/her site and collecting their contact details. It's a well know and widely used approach.

My own view is that this approach to web marketing is flawed. Here's why...

• It builds a list full of people seeking freebies (i.e. cheapskates)
• The resulting list may be targeted in the sense that it contains people interested in the product category the freebie relates to. But did you really mean to build a list full of cheapskates?
• Everybody is using this strategy. And 99% of the people using it are giving away low-quality rubbish. Anybody with any sense now knows that giveaway reports and services are less valuable than preserving their email privacy. The people you want in your list probably won't sign up
• The low bar set by the people using this strategy mean the lure of free no longer works

Put another way, I think this approach to web marketing is ultimately a form of strategic suicide. A sale is made when somebody wants what you have to offer at the price you're offering it for, and trusts that you'll deliver it.

Without that trust, the sale won't occur. It's something you need to earn, or borrow from a trusted third party (e.g. a referral from a mutual and trusted friend).

Objectives: The web marketing process (part 5)

This article is part 5 of a series. You'll find part one here. And part 4 here.

Get live updates as each new part is released: Follow on Twitter.

In parts 2-4 we looked at setting objectives for a web marketing campaign. In particular, we found out how to use the resulting information to find the number of visitors needed to achieve the campaign revenue target.

A Campaign Plan is an essential component of The Web Marketing Process. In fact, another way to think about The Web Marketing Process, is to view it as the section headings of a marketing plan. Click the following link and download section one of The Web Marketing Process Campaign Plan (free PDF, no email address required).

Once you have the Campaign Plan displayed in a browser, I suggest you print a copy for yourself so you can refer to it easily throughout the rest of this article. If you find any of the following confusing, revist parts 2, 3 and 4 of this series.

This is section one of the Campaign Plan. As you progress through this article series, you'll be able to download other sections of the plan until you have a complete Campaign Planner.

Naturally, section one focuses on objectives and targeting. In this article, we'll look at objectives and move onto targeting in part 6 of The Web Marketing Process.

How to fill out the Campaign Plan:

Name:
You can call the campaign anything you like. Ideally the name should make it possible to tell one campaign from another. For example, if I was running a seminar on the 9th of December I might enter: Seminar 09/12

Start Date:
The date the campaign promotion starts. For example: 2/11/09

Budget:
The amount you're prepared to invest in promotional costs. For example, the amount you'll invest in advertising, copywriting, photography and whatever else you'll need. Example: £500

% ROI:
The desired return on your campaign budget. Example: 200%

Target Revenue:
The amount of your budget plus the return on that money. Example: £1,500 (£500 + £500 x 200%)

Average Income Per sale:
The amount you expect to make, on average, per sale from this campaign. Example: £150 and ticking (i.e. checking) the Net box

Sales Required:
The number of sales required to achieve the target revenue. This is the target revenue ÷ the average revenue per sale. Example: 10 (£1500 ÷ £150)

Appointments Per Sale:
The number of appointments needed, on average, to get 1 sale. If you don't know, start with a guess. Example: 4

Leads Per Appointment:
The number of leads needed to get one appointment. If you don't know, start with a guess. Example: 4

Visitors Per Lead:
The number of visitors needed to get one lead. Example: 28

Visitor Target:
The number of visitors needed to achieve the target revenue. This the visitors/lead x leads/appointment x appointments/sale x sales required. Example: 4,480 (28 x 4 x 4 x 10)

Budget/Visitor:
The amount of money I can afford to spend on each visitor. This is the budget ÷ visitor target. Example: £0.11 (500 ÷ 4480)

You should now be looking at the initial information you need to start your first campaign. As soon as you've completed the initial section of your Campaign Plan, you're ready to move onto part 6 in this series - Target Marketing.

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Objectives: The web marketing process (part 4)

This article is part 4 of a series. You'll find part one here. And part 3 here.

Get live updates as each new part is released: Follow on Twitter.

What can this Information Tell You?

In our example from parts 3, we expect to achieve the campaign target if we're able to send 1,980 people to the web site. But how likely is this?

Most business web sites already get visitors. Let's say our demo site gets 20 visitors per day, and that we plan to run our first campaign over a 30 day period.

That gets us 600 visitors that cost nothing. This means we have to find another 1,380 visitors from somewhere.

We have £1,000 to spend, which is a budget of 72 pence per lead. It might be possible to generate all 1,380 visitors using Google AdWords. It's worth checking with Google's KeyWord Analysis Tool to see whether or not this is likely.

The point is, we now know how much we can invest per lead. In the case of Google AdWords, you can set a maximum bid of 72 pence. You only pay per click, which ensures the campaign will come in on budget.

If your ratios are too conservative, you'll beat your target ROI. If they're too optimistic, you won't achieve your target. Once the results are in, you can use the hard data you've collected to adjust the ratios you're using.

Over time, you'll find you get better and better at accurately predicting the outcome of a campaign.

You can even use this data to predict whether or not any given advertising is likely to pay off. This alone can save you thousands of pounds by telling you when advertising is too expensive for your particular campaign.

Doing the Math

The campaign budgets and ratios I've described here can easily be tracked using a spreadsheet. In fact, the maths is so simple it can easily be tracked on paper. Another alternative is to use a campaign calculator.

A better approach is to create a plan for each campaign you do. In part 5, you'll find a handly campaign plan you can fill out and use as a basis for your next web marketing campaign. It contains everything you need to plan the Objectives phase of a campaign.

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Measuring Social Media

Measurement is at the heart of all successful direct marketing. The same goes for web marketing. If you can't measure it, how do you know it's working?

Social media (e.g. Twitter, Facebook) presents some interesting challenges when it comes to measurement. These challenges are generally thought to be unique to the medium.

This article on MediaPost purports to provide 100 ways to measure social media. It makes for interesting reading, and may well present a convincing argument to many. Anybody with a background in direct marketing, and a healthy disrespect for the way brand advertising is measured, will immediately recognise social media measures for what they are.

I do think you can measure social media. The things you can measure are the things you've always been able to measure. All you need is a way to track your content. And on the web, tracking can be automated from the initial content through to a sale. As a result, you can easily measure...

• Number of visitors
  
• Number of responses
  
• Number of sales
• Revenue
• Costs
  
• Net profit

Everything else occurs to me as an attempt to grab hold of smoke, and throw it in the eyes of the people paying the bill. That article I linked to above suggests a measure called buzz. But what does "buzz" actually mean? What does it tell you? How does it relate to profit? How is a "shift in buzz over time" useful in a financial sense? How do I relate it to the things that matter in business. Why is a "shift in buzz" a signal that my social media activity is helping the business?

I'm a sometimes crotchety direct marketer from way back, and all this talk of abstract measures remind me of "top of mind" and "share of mind". I think measuring "buzz" is a waste of time, useful only to ad agencies seeking to justify large bills and line managers with an eye on building an empire.

Objectives: The web marketing process (part 3)

This article is part 3 of a series. You'll find part one here. And part 2 here.

Get live updates as each new part is released: Follow on Twitter.

In part 2 we looked at...

• You have a budget of X dollars
• You're looking to generate a return on that budget of Y percent
• You expect to earn Z dollars per sale

You can use this information to work out how many visitors you need to get to your site to achieve your web marketing revenue target. Here's how...

Number of sales required:

If our revenue target is £1,100, and we expect to make £100 per sale, we need to make 11 sales. That's...

£1,100 ÷ £100 = 11.

Now we can take that figure, and estimate the number of appointments we'll need to achieve the desired return on investment.

Number of appointments needed:

Most of us probably have a rough idea of how many people we have to see to make one sale. If you don't know, start with a conservative ratio such as one in 10.

You can then adjust it as the results come in, and you get a better idea of how many appointments your company converts. In the case of our example, let's go with a conversion rate of 1 in 3. So we expect to make 1 sale per 3 appointments.

That means we need 33 appointments to reach our target ROI. Why? Because we need 11 sales, and we have to see 3 people to get 1 sale.

11 sales x 3 people = 33 appointments in total.

The next step is to find the number of leads needed to generate 1 appointment...

Number of leeds needed:

We now know we need 33 appointments to achieve our desired ROI. Let's look at how many leads we need to generate, to reach the required 33 appointments.

If you don't know your current leads to appointment ratio, use a conservative one in 10.

For the purposes of our example, let's go with one in 3. That is, we need 3 leads to make one appointment.

This tells us we need 99 leads to reach our target ROI (3 leads x 33 appointments).

From this figure, we can work out how many visitors we need to send to the web site to achieve the desired ROI in your Internet Marketing campaign.

Number of visitors needed:

The next ratio we need to know is the number of visitors required to generate 1 lead.

If you don't know this ratio, use a conservative one in 100. For the purposes of our example, let's go with 1 in 20. That's 20 visitors to get 1 lead.

This tells us we need to send 1,980 visitors to the site to achieve our campaign target of £1,100 (99 leads x 20 visitors).

The Ratio Recap

Let's take a look at our objectives and ratios from scratch...

1. We set a campaign budget of £1,000.
2. Our target return on investment is 10%.
3. Our campaign objective is to earn £1,100.
   
   
4. Our average income per sale is £100.
5. This means we have to make 11 sales to achieve the campaign objective of £1,100.
   
   
6. We expect to convert 1 appointment in 3 into a sale. So we need 33 appointments to achieve the campaign objective.
7. We expect to convert 1 lead in 3 into an appointment. So we need 99 appointments to achieve the campaign objective.
8. We expect to convert 1 visitor in 20 into a lead. So we need to send 1,980 visitors to the site to achieve the campaign objective.

Your ratios may start out as guesses. Once you've completed the first campaign, you'll have real ratios for the next lead generation campaign. Over time, your ratios will become more and more accurate. This is why I describe the web marketing process as a virtuous circle.

In the next part, we'll look at why this information is useful and what it can tell in advance of campaign (i.e. how it can save you money and eliminate mistakes).

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The Web Marketing Process (part 1)

This is part 1 of a series of articles. Get live updates as each new part is released: Follow on Twitter.

The Web Marketing Process contains 5 steps, each working together to deliver ever more profitable campaigns. The 5 steps are..

1. Objectives
2. Visitors
3. Leads
4. Follow up
5. Report

The web marketing process is a virtuous circle. Each step contributes something essential to the one that follows.

The 5th step contributes crucial information that feeds back into step one of the next campaign.

The web marketing process is the key to success that drives all wildly successful online marketing campaigns. And it's the best way for you to build an enormous competitive advantage. Let's take a look at each step now...

Step One: Objectives

In step one, you state your desired return on investment (i.e. profit). You then work backwards to determine how many visitors you have to send to your site to achieve your target. I'll explain how to do this in a future blog entry.

You also define your target market(s) in step one. This information is essential to the success of step two (and the rest of the campaign).

Practical target marketing also pays off in step three, and is the subject of a future article in this blog.

Step Two: Visitors

Getting visitors to your site is essential to your web marketing success. The questions you'll need to answer are...

• What sort of visitors do you want?
• Where do they hang out on the Internet?
• Where do they hang out offline?
  
• What's the best source of visitors for this specific campaign?
• How much money do you have to play with?
• What can you do if you don't have enough money?

This is where proper target marketing really pays off. As you can see, there's a lot to getting visitors to your site. I'll look at a number of different ways to get targeted visitors to your site, including SEO marketing, in a series of future blog articles.

Step Three: Leads

Getting visitors to your site is essential, but it's not an end unto itself. The web marketing process is about making money. To do that, you have to convert visitors into leads.

Put another way, step three is about lead generation. The key components in lead generation are...

• Landing page
• The offer
• Copywriting
• Conversion

There's a lot more to lead conversion than meets the eye. Once again, I'll take a specific look at the tips, tricks and techniques of lead generation in a future article.

Step Four: Follow up

Now that you have leads, it's time to work on the sale. This involves follow up. For most businesses, a systematised customer relationship management (CRM) system is worth its weight in gold.

Naturally, it all works far better if you're following a plan that started way back when you first defined your target market. What's more, your offer and call-to-action (conversion) in step three ought to be integrated with and support your follow-up process.

The end result of the follow up process must be either a 'yes' (i.e. a sale) or a 'no' (i.e. no sale). You can't progress to the final step until you've forced each prospect to make a decision.

Step Five: Reporting

The web marketing process doesn't end with the sale. This is a virtuous circle. The fifth step is designed to provide essential information for step one of your next campaign.

In particular, you're going to want to know whether or not you achieved the profit and visitor targets you set in step one. In addition, you'll need to look at the following...

• The results of any split testing (e.g. an A/B test on your offer, or copy, or call-to-action)
• The actual ratios achieved in steps 2 and 3 versus the ones you used in step one
• Anything else you were testing (e.g. different visitor sources)

This data is then fed back into step one, and used in the next campaign. Over time, your ratios become incredibly accurate. It becomes possible to predict, accurately and in advance, whether any given advertising is likely to deliver your profit target. This alone is an enormous competitive advantage, and will save you thousands of dollars.

That's the power of the web marketing process. You'll find specific and detailed information about each of 5 steps in an upcoming series of articles. They're to be published right here in this blog, and the first is due out soon.

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Target Marketing - The Critical Success Factor

Every now and then I'll meet somebody with a fairly low opinion of marketing. Such people seem to love nothing more than sharing their cock-eyed view of the world.

Recently I had the 'good' fortune to be trapped with just such a person. He proceeded to tell me that targeting was a load of rubbish. His particular approach to marketing is as follows...

• My product is marketed at everybody
• I don't want to risk losing a sale by excluding someone
• If they're alive and have money in their pocket, they're in my target market

This person is certain he's never made a profit on any advertising he's ever bought. Naturally, he blames the advertising rather than himself. Naturally, he has no data to back up his claims. And naturally he thinks marketing is a scam.

What's interesting to me about this person is how his comments about target marketing illustrate why his advertising efforts have failed.

His unwillingness to consider the purpose of a target market is the very thing that makes his advertising ineffective. The plain fact is, ad copy can't be powerful if it isn't written with its intended audience in mind.

The things you need to say to get a 50 year old excited about your product are different to those needed when talking to teens.

Knowing who your target market is makes life much easier. Here's a list of everything it can tell you...

• Where to advertise:
  If your target market consists of single parents, you can use Google to find the sites they already visit
• How to write copy:
  If your market is young urban teens in the UK, it's useful to write the way they speak
• What to offer:
  Once you know where they hang out online, you can observe what they're interested in. This research will help you construct a powerful offer
• How to set the price:
  Find out what they're already buying, and price accordingly
• Affiliate opportunities:
  In your online travels you'll come across plenty of sites that market complimentary products. Touch base, and discuss joint-marketing opportunities. Twitter can help you find and build these types of relationship
• Social media:
  Some target markets are very active in certain social media. This can help put you in touch with your market, and is an excellent way to observe your market and gain a deep understand of what motivates them
• Lead generation:
  Lead generation only works when you have powerful copy and a compelling offer. Without a clearly defined target market, lead generation will fail (as will direct sales)

The importance of target marketing can't be overstated. Every marketing activity ought to flow from target market. When the audience is well defined, and properly understood, everything seems obvious and simply falls into place.

Why does online marketing beat offline?

My marketing career began in the early 90s, as a direct marketing grunt for a financial services company. Back then, most people had never heard of the Internet, and it wasn't something marketing people talked about. Every marketing activity was offline.

In 1999 a friend and I started an Internet ad site. I began working full-time for the business in January 2000. From that point on, every single marketing campaign I took part in happened online. For me, the world of marketing transformed completely in just 3 short years.

Now it seems that every business is moving its ad spend online. Even in a recession, the data shows Internet marketing spend continues to outstrip offline. The question somebody from 1990 might ask, is why? Surely offline advertising still works?

Well yes it does, but it can't possibly hope to compete with the benefits of online marketing. Consider the disadvantages of offline advertising...

1. Offline isn't automated, so tracking is manual. Of course, you can direct people to a web site. But you can't be certain everybody has access to the web so must also provide a manual response mechanism (which will probably cost money)
   
2. Almost everything about offline costs money. Online you can dilute your ad costs with free promotion techniques
3. It takes longer. Some things take a while online (e.g. waiting for articles to be approved). But most things happen straight away
4. It's possible to test multiple concepts and pick a winner within 24 hours. This used to take weeks offline. What's more, if you have sufficient social media marketing leverage, you can run your testing at no cost to you (this web page explains how to get free traffic with Twitter)
   
5. You can't change it once it's done. If you print 5,000 fliers and then find an error, you either live with it wear the cost of replacement. Web content is real time (apart from the lead time on article marketing of course), so is easy to change. And it costs nothing to do so
   

Faced with these issues, it's tempting to wonder why anyone would bother with offline promotion. Surely the web has it beat every which way you look? Of course that's not true. There are reasons to go offline...

• Some markets still aren't well represented on the web
• Some media is still better offline (e.g. paper magazines are easier to read and more convenient)
• The web isn't absolutely everywhere (e.g. billboards - though this is changing)
• Most people still listen to the radio while driving

I doubt offline marketing will die out completely. There is still a place for brochures, business cards, news papers, magazines, TV, radio and signage. I do think offline will continue to decline, and online will get ever smarter and more innovative.

I also think we've barely scratched the surface of what's possible with Internet marketing, as the social media marketing revolution has demonstrated.