This is a guest post from John Clements, a Direct Response / Lead Generation Marketing consultant.
Your marketing expenses are probably the biggest variable you can control. Those advertising dollars could directly determine the amount of your profitability. Controlling your marketing is how can you stop wasting money and keep more it!
Now by “control,” I certainly am not advocating unnecessarily limiting your marketing spending; rather, I’m saying — spend wisely.
“How do I spend wisely?” you ask. By knowing absolutely, without question or assumption, what marketing programs or channels are the most to least effective, and eliminating the least effective ones. You can re-direct your marketing resources in those areas that are the most profitable.
Tracking is the answer to knowing what sources are working (or not) for your company, whether they are offers, lists, creative, or channel specific. Which call-center agents or event/show promoters are the most or least effective? Not just the ones that produce the most leads . . . but more importantly, which ones convert those leads/inquiries into the most appointments? And which ones ultimately result in installed business?
If you can’t identify which marketing channels or individual efforts or “tests,” are the most cost-effective, you cannot accurately focus more resources on the “winners,” and thus, increase leads, revenues, and bottom-line profitability! (NOTE: “Valid Testing Methodology” is the topic of our next article.)
For an example, let’s say you’re spending $35,000 this week. $5,000 each on solo Direct Mail and Co-ops, 2 radio stations, and 3 TV stations. Your overall Gross Sales were $350,000; therefore, your Ad Ratio (cost of marketing / Gross Revenue) is 10% (or whatever your “allowable” range is). Your advertising was cost effective for your organization. Congratulations!
Without tracking all you have is the summary of your cost of marketing and its effectiveness.
With tracking, you discover that:
- There were no leads or sales from 2 of your TV Stations! That’s $10,000 down.
- The other station brought in $75,000 (6.67% G/Ad Ratio). One radio station brought in twice as many leads but no sales; however, the second station brought in $50,000 (10 % G/Ad Ratio).
- The solo Direct Mail represented $100,000 (5% G/Ad Ratio) in Gross Revenue while the Co-ops were $125,000 (4% G/Ad Ratio). But the mail’s cost was twice as much.
- Both Direct Mail and Co-ops’ performance was outstanding, the Co-ops brought in additional branding awareness for your company because of the increased household coverage.
Do you see how, going forward, you could re-direct your resources based on factual knowledge?
Tracking can be as simple as having a different “extension” on each different ad if you’ve only one phone number. Simply provide a spreadsheet with the “extensions” in use and their corresponding source; ask your agents to keep track of the calls they receive asking for a particular extension. Although with human error it’s not fool-proof, but leaps and bounds ahead of not knowing at all. Of course, tracking from the raw lead or inquiry to appointment and then to sales is a little more difficult.
You could use an outside source such as Who’s Calling or Ring Central to provide 3rd party separate “800” numbers for each of your ads. But again, it would be your internal staff’s responsibility to be able to track those leads through the process to Gross or Net Sales.
Or tracking can be more sophisticated with a different Validation Code being assigned to the following components, depending on the lead tracking software you’re using.
- Week of
- Source or channel
- Specific list segment, broadcast station, internet ad, etc.
With the proper software, you can also track the hours, salary, and productivity of your call-center agents, event/show promoters and Sales Representatives (even how effective they are per lead source).
By far the most comprehensive and cost-effective lead, sales, agent/promoter software is LeadPerfection. LeadPerfection is a totally enterprise-wide scalable system from marketing to sales to production and finally, accounting. The system is as easy to use as the Internet and provides easily read productivity reports for each department. (NOTE: While I recommend LeadPerfection, I am not affiliated with this company in any way, nor do I receive any compensation from them. After research of the 3 leading tracking companies, my clients and I have found it to simply be the best.)
Accurate tracking of your marketing channels, creative, list or offer tests, etc. is critical to improving your company’s customer acquisition process. Imagine the effect on your year’s end profitability if you could spend the same amount of dollars but increase your leads and revenues? You and your business will both grow.
– John Clements is a Direct Response/Lead Generation Marketing consultant. He can be reached at JClements@ClementsMktgGroup.com or 631-981-1994. www.ClementsMktgGroup.com