Establish a Baseline Measurement for Your Marketing Strategy
What a Marketing Consultant Should Do the First Month
My name is Graham Onak, owner of GainTap and online marketing consultant. I’m often asked about what I’ll do in the first month at a company. The reality is before I’m even hired, a good deal of work is done during the proposal phase in order to understand the unique state of the client’s business and to establish a baseline measurement.
Identifying a Performance Measurement Baseline to Build On
If someone is interested in hiring me, they need help focusing their marketing efforts. Most companies I speak with don’t have dedicated marketing hires in-house. I’m usually coming in to assist a position that has been jointly held by the CEO or founder, a sales director and maybe a marketing assistant. Everyone is doing a little bit of marketing every once in awhile, but there’s no clear direction or accountability for the company to market itself cohesively.
An outside perspective is valuable for growing companies.
This is common among growing companies. They don’t update processes or allocate resources because they’re too busy fulfilling work. If there’s an internal marketing person at the company, this person is usually too close to the work and can’t see the big picture - everything is tactical instead of strategic. This often means there’s a lot of data floating around, but with no clear action being taken on it. Again, this is very common among fast-growing organizations that go from zero to six-figure plus revenues in a few years.
You can’t measure growth without a performance baseline.
But, before you can create a strategy for getting somewhere, you have to understand where you are right now. Otherwise, you’ll have no idea if things are improving or getting worse. Luckily, analytics tools make that incredibly easy to measure, but it takes focus and experience to turn piles of data into useful information.
Analyzing your website is a great starting point.
When I first meet a prospective client, I’ll almost always ask for access to Google Analytics, or a similar app, before moving into the proposal stage. This helps me understand the website and the performance of other digital channels. I’ll ask myself the following questions: are they getting visits but no conversions? Do they have any visits at all? A proposal of work for a startup vs. an established company is wildly different, so understanding the baseline is critical in terms of managing client expectations and developing an effective marketing strategy.
Company products and services need to be clear to customers.
Strong products and services are much easier to market and sell. Clarifying your products and services is essential to marketing them effectively.
Which products or services should you focus on?
For companies with a selection of products, it’s often best to focus on the big money makers. Sometimes my clients already know what this is; other times, they need help figuring it out. I was once approached by a company that had been in business for twelve years. They just launched a new product that had been on the market for three months and it was already making up 33% of their revenue. Their goal was to shift 100% to this product for their main revenue within three years. Knowing that was helpful for me to develop a plan to make that happen.
The Value of Understanding Customers
It’s important that - as an outsider of an organization - I fully understand their customers. That means meetings with sales personnel as well as analyzing customer information for buying patterns. Understanding the value of a customer is critical to developing marketing budgets, which will assist with developing a marketing strategy and plan.
Identifying Customer Segments
You absolutely have better customers. Pretending that all your customers are equal is an easy way to waste resources and fail to differentiate customer segments in a crowded market. Creating customer groups will enable you to use fewer marketing resources and have higher conversion rates by focusing efforts on high-value prospects.
What about your company do your customers value?
Why do your current customers buy from you? Why would they pay a premium for your products and services? How does working with your company make them feel? If you can’t answer those questions, I know who can: your customers and your sales people are the primary groups who understand the value your company provides. Listening to them is essential to identify the true value your company provides in the market. One of the first things I do is interview both the sales and marketing staff in order to understand the value a company provides. Here are the top questions I ask:
- Who are your customer groups and what do they look like?
- What’s working and what’s not working?
- How can your marketing staff empower sales to sell better?
- How can your sales staff empower marketing to market better?
- What needs to be done to align the sales and marketing staff moving forward?
- What are the marketing staff’s strengths and weakness?
- What resources do we have - list of customers, sales collateral, advertising collateral, graphics, videos, etc
- What marketing campaigns are running or planned for the future?
Set company goals for marketing to achieve.
You know a great way to make sure you exercise regularly? Sign up for a 5K. Just knowing you have an obligation to run will encourage you to go out and run more often. The same can be said for setting goals in marketing. Even if it feels like you have no idea what your goal should be, anything is better than nothing. Having a solid number to hit by a certain time will focus your efforts.
Align marketing goals with the company’s overarching goals.
Most CEOs have a rough idea of what they want to accomplish - they may not know how to do it, but they have a number in their head. This can be anything from “selling 100 more tractors next year” to “increasing revenue by 30%.” What it is, it gives us something to build on.
Strategy and tactics can be created to achieve the company goal.
A deeper analysis of the company’s performance will lead to a rough projection of metrics that need improvement. If the company relies on its website for driving leads or sales, website metrics can shed light on conversion rates for forms and landing pages. Combined with product, service and customer value data, projections of visits, the cost per visit, estimated advertising costs and estimated revenue can be developed. This projection will help guide a strategy, marketing plan and budget to reach the company goals.
Set a marketing budget - even if it’s arbitrary.
Most CEOs I speak with don’t want to talk about marketing budgets; they’ll say the budget is virtually unlimited as long as there’s a positive return on investment (ROI). I understand this concept, but for companies who have been doing absolutely no organized marketing, there has to be a starting point. Setting a marketing budget is important for the following reasons:
- It creates accountability for spending money on growing the business.
- It creates accountability for measuring how marketing is affecting revenue.
- It provides clarity on what tactics are available for use in a marketing plan.
Just like trying to find the right movie on Netflix, there is an overwhelming number of tactics when it comes to marketing your business. But setting a marketing budget will help remove options from the table and make you focus on what’s possible.
Spending money on marketing is essential for business growth.
For companies with under $5 million in revenue, 8 percent of gross revenue is the suggested marketing budget spend, according to the Small Business Administration. One way to think of it is this: 5 percent is maintaining your current position; 10 percent is slight growth; 15 percent or more is growth focused. This varies by industry and depends on the margins of your products and services. If you’re a $3 million company, you could be seeing growth by spending $300,000 a year on marketing. That’s $25,000 a month covering wages and costs related to marketing, all of which can be written off by your accounting department. If that’s too much, spend at least 5% of your gross revenue on marketing to set a baseline.
Developing a marketing strategy that works requires trial and error.
Marketing is a science; it involves a lot of testing. Sometimes tests produce desired results. Sometimes they don’t. Measuring the effects of marketing tests is the only way a company can identify what works and what doesn’t. If something doesn’t work, change it. If it still doesn’t work, change it again. If nothing makes it work, stop spending money on it and try something else. And of course, if something does work, spend money on it.