This Week's Question: I feel like I'm wasting money on marketing. How do I tell what's working or not?
I know I need to spend money on marketing, but I feel like I'm wasting my money. How do I tell what's working and what's not?
The famous retailer, John Wanamaker, is quoted as saying, "half the money I spend on marketing is wasted. The problem is, I don't know which half." This is one of the most challenging things about marketing. How do I know what's really working?
So that when sales go down and the phone stops ringing, you know exactly what to do to bring the cash in again. If you want to know if you're wasting money on marketing, keep watching!
Hi I'm Tom Malesic, founder and President, of EZMarketing and you're watching Ask EZ. This is where small business owners go to get real answers to their marketing questions.
identify your goals
The first thing you have to do is identify your goals. Just saying, I feel like I'm wasting money, means you probably had some expectations that your marketing just isn't meeting. For most small business owners your primary goal is probably to increase revenue, in other words, get more leads and make more sales.
Your secondary goal is probably to have people know about who you are, in other words, brand awareness. If you don't know what your expectation is, it's hard to meet that. So let's move from, I feel about something, to I actually know the facts.
do things that are trackable
To know if your marketing is working, you have to track and measure it. But how do you do that? The answer is do things that are trackable. Okay, but what do you track?
For your website, you can track the traffic coming to your site, or you can track forms that get filled, or even phone calls that get made to you directly from your site. For email marketing, you can track how many times your email was opened, or if they reply to you. For Google AdWords, you can track the clicks to your website, or phone calls, and form fills. And for geofencing, we can track how many times people click to your website, or even that they showed up in your store.
No matter what, always do things that you can track.
what do you measure?
Now, what should you measure?
Honestly, there's lots of things that you can measure, metrics get really granular. As a business owner, I want you to focus on the big picture. Which is, is this marketing tactic generating revenue? I want you to focus on three things.
1. First, I want you to focus on lead source. Where are the leads coming from?
2. Next, I want you to focus on customer source. Where are the customers coming from?
3. And last, I want you to focus on revenue source. So of the leads that came in, which ones do we actually make the most money on?
Now that you know that it's working, we need to figure out if you made money or not. How much money did you spend to get the sale? Think about tracking your cost per lead, or your cost per sale. Some elite sources are going to be much more cost effective than others. So you need to figure out, how much can you actually spend to get a new customer.
Now that you know what's working and what's not working. You can make a great business decision to say, well let's do more of the stuff that's working, and less of the stuff that's not working.
The problem is, very few small business owners will actually take the time to track and measure their marketing. I know you're going to say, "Tom, I'm just too busy. I have all this other stuff to do and it's tedious boring paperwork." But listen, you have to do it. It's going to make all the difference in the world, of putting money in your pocket or just wasting your cash.
So here's your homework:
I want you to go back and identify the lead source of where your customers are coming from. Go back through all your past sales from this year, and write down where they came from. You're probably going to run into that you're not really sure where they came from, they might have come from multiple sources. Just pick the one that makes the most sense to you.
Moving forward, I want you to track and measure all of the leads that come into your business. I know it's hard, but you can do it. On this page, we're giving you a download to our lead tracking template, to make it really easy for you.
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