Is your online marketing budget optimized? You may be able to do more with your budget than you realize – if you avoid some common pitfalls businesses make with their online marketing.
Here are mistakes to stay clear of:
Not tracking cost per lead and value per customer
Many small businesses fail to track the costs of acquiring and serving a customer. Fact is, the more detailed your tracking is, the more you can optimize your marketing budget. For example, by segmenting sales and online marketing data, I helped a client cut 50 percent of their marketing costs without impacting sales. You can never be too detailed with your tracking, since everything can be automated nowadays!
Not diversifying lead sources
Many businesses tend to rely on one or two sources of leads – usually whatever is the easiest or the cheapest. So, when the tide turns south on their only source of leads, they go out of business. Always diversify your marketing as much as possible. Build your building like the Parthenon, not the Tower of Pisa!
Taking current lead sources and marketing costs for granted
Online marketing costs tend to start cheap and become more expensive over time due to increased competition. Companies that started doing pay-per-click (PPC) ads a few years ago will notice that it used to be a lot cheaper to run ads in Google AdWords. The same thing applies to search-engine optimization (SEO) and social-media marketing. The moral? Make sure you leave enough room in your budget planning to accommodate increased costs in your current methods of advertising.
Not budgeting for time spent
As a mentor used to say, “In business, you can either spend time, people, or money.” Many at-first-glance free online marketing strategies aren’t free once you count the labour costs.
Not balancing between builders and drivers
A driver is any marketing activity that drives business in the short run; a builder is a long-term activity that builds web traffic or brand equity over time. Sure, it’s easier and more immediate to focus on short-term strategies. But don’t ignore builders even if the temptation is high. Some companies have found themselves in trouble because they started depending too much on fast, cheaply obtained search traffic. When consumers started to go to the big brands directly instead of searching for the products or services, these companies lost market share and never recovered. My recommendation: Always put at least 30 percent of your online marketing budget towards brand-building.
Not scaling positive ROI quickly enough
Successful entrepreneurs share one common trait: They scale up good ideas quickly and cut bad ones even faster. I often see business owners limit their marketing spending to a play-it-safe strategy, even though the campaign has a positive return on investment (ROI). Eventually other players enter the market and take the unclaimed market share. Lesson: Be aggressive and scale up quickly while luck is still on your side – because it won’t last long.
Not planning their budget ahead of time
Lastly, many businesses get into online marketing activities without proper planning. Specifically, they will wait until one of their competitors does something, and only then scramble to do the same. The project is often rushed and fails to provide the intended results. So, plan ahead for a few months so you are not always in a rush. By building a digital roadmap of marketing activities, you will be in a better position to hire the best team, to get the best results – and therefore to realize more out of your marketing dollar!
A final comment. In 2012 I’m seeing many enterprise clients thrive and bounce back from the recession, while a lot of small businesses struggle with increased pressure from larger competitors. It seems that many large-to-medium-sized businesses have become digital citizens, and small businesses are quickly losing the Internet as a cheap marketing tool. Small business owners: To remain successful in the long run, avoid the pitfalls listed above!
Martin Wong is a partner at Smartt (www.marketingsmartt.com), a consulting agency that creates and executes digital roadmaps for ambitious organizations. With over 10 years’ experience in online marketing, Martin combines his extensive insights and Google certifications to provide informed and measurable business solutions. Martin can be reached at 604-473-9700 or firstname.lastname@example.org