Wasting your precious marketing dollars is something we all have done. The folks at Entrepreneur share 6 ways we are wasting our marketing dollars.
Top 6 Marketing Money Wasters
By Entrepreneur.com View Original
Recently, I got a call from a small business owner who was wondering when all the money he was spending on marketing would show returns. His company was running Google AdWords and Facebook ads, they were active on social media, they’d paid a website company to run their website and do their SEO.
I asked him how long he’d been executing his strategy. “Six months,” he told me. My jaw dropped to the floor. “Are you serious?” I said. This guy has flushed over $50,000 down the toilet with nothing to show for it.
Stories like this just break my heart because small business owners have such a low margin of error. All the money they spend is the money from their own pocket. Money that they would otherwise use for themselves, for their family, for their lives. But they waste it on marketing because they don’t understand how it really works.
That stops now. Here’s what I’ve learned over the years are the biggest marketing money wasters and what you can do to avoid them.
Money Waster #1: Starting with Logos and Branding
I had a client once who was starting a 3PL shipping company. He came into my office all excited one day saying, “I was listening to Mozart, and I realized shipping is a lot like Mozart’s music so I’m going to name the company Mozart Shipping.”
I told him nicely that I appreciated his passion, but he was running a shipping company. His customers wanted to know their items were secure and safe. They weren’t hiring him to ship musical instruments.
Many small business owners think creating a clever logo and branding is their first order of business. Their reasoning: “Without that logo, I don’t have a business.” So they spend a whole bunch of money hiring someone to help them do this. But nine times out of 10, this strategy doesn’t work. As their business grows and changes, so must their logo and branding. They end up having to keep paying someone to redo it multiple times.
The first thing a business owner needs to do is figure out what’s unique about your company. Second, what do the other logos in your industry look like? You want to be industry appropriate but also a little different. This way customers know what you offer, but they’re also intrigued.
Look at the different logos online and pick out the elements you like the best. Once you do that research, then give that brief to a designer or a design company, you’ll save yourself a ton of time and money.
Money Water #2: Building a Web Site Right Away
Everyone thinks, “If I build a website, they will come.” It’s not true. Think of a website not as the end game but as a cog in your marketing wheel. This is not 2001. No one’s tripping over your website by accident. You must have a strategy that drives traffic to the website, and then from the website, you need to be taking customers somewhere—on-site or off the site—to close the deal.
And your website doesn’t have to be fancy with all the bells and whistles. You just need a strategically built website that helps people buy stuff.
Money Waster #3: Using A One-Size-Fits-All Social Media Strategy
Many spend all this money hiring people to run their social media, but they don’t get results they desire.
The reason is twofold. First, the social media experts they hire often don’t necessarily get their voice. Thinks of social media as a giant party. You don’t want someone else showing up to that party, wearing a “you” costume, who doesn’t sound or think like you. It just comes across as fake, transparent, or just plain awkward. And everyone else at the party will ignore you.
If you’re hiring someone to be you at the party, then they need to really get to know you. They need to sound like you. You need to train them to have your voice.
The second reason social media strategies fail is that companies try to execute the same social media across multiple platforms—Facebook. Instagram, LinkedIn, etc.
Again, if social media is a party you don’t want to show up wearing a tuxedo to a little kid’s birthday party or shorts to a wedding. All social media platforms have different uses and requirements. Rarely does one person know how to master each platform. When you hire someone to do social media, you need to figure out their platform superpower. It’s far wiser to hire a different expert or each one. Hire more part-time people if you need to.
Money Waster #4: Blindly Placing Pay-Per-Click Ads
Many business owners are lured by the simplicity of interfaces like Google Adwords and Facebook Ads. But just because they’re easy to use, doesn’t mean they’re going to bring you sales. PPC ads are a science. For every ad, there are at least five critical moving parts, including the header language, the subtext, the imagery, and targeting. I’ve worked with some of the top experts in the world, and they will babysit and tweak these ads all day to make them work well. Don’t try to do PPC on your own without knowing everything about it. Hire a professional to help you or learn about it yourself via YouTube videos or paid courses.
Another money waster I see made in the PPC space is when companies drive online traffic to a non-converting online funnel. As I said in mistake #2— if your website doesn’t convert, paying to drive traffic to a website that doesn’t convert is like asking to flush your money down the toilet. It doesn’t help.
Even worse— I’ve seen people try to use online advertising to drive people into a physical store. It’s not going to work.
Make sure that your offer is strong, that customers can get it quickly, and that you’ve got follow-up strategy. You’ve got to have a proper backend that converts when they click.
Money Waster #5: Siloing Sales and Marketing
When you’re a small business, you can afford to separate marketing and sales. Say your marketing gets someone in your funnel, you still need to close the deal.
Fact 1: 80 percent of sales are made after the fifth follow up. You read that right—the fifth
Fact 2: Only 10 percent of salespeople ever reach out five or more times. That means that 10 percent of salespeople close 80 percent of the deals.
What does this mean? If you don’t have a good follow-up, you’re losing 80 percent of your sales.
My best advice for small business owners is super simple. I call it call-email-call. If you’ve got a call with someone, you follow up with an email. If you start with an email, follow up with a phone call, and then an email. Up to three communications per week is fair.
And warn people what you’re going to do. Otherwise, it can get a little weird. Let’s say I meet you at an event and we hit it off, and maybe you want to buy from me, then we say goodbye and you get an email from me and then a phone call. It’s like, “Okay, stalker. Back off.”
But let’s say at the end of the event, I ask, “Do you want me to send you a follow-up email tomorrow with some more information?” You say, yes. So I send you that email because I warned you; I fulfilled my promise. At the end of that email, I write: “I’m going to call you in the next few days to see if you have any questions.” Then I call you. Am I still stalker, or am I professional?
Money Waster #6: Not Knowing When to Quit
Before you spend any money on marketing, you need to do a breakeven analysis. Think through what it’s going to cost you to run this marketing endeavor from the cost of any assets you need, companies you might hire, time spent —all of your expenses
Then estimate what income you will bring in and how much money you’ll earn from each customer. If you don’t know this, you shouldn’t spend any money to start with.
Next, do some calculations. If you’re running a $10,000 ad campaign and you sell something that’s $4.95 with a 10 percent profit margin, you need a whole lot of people to buy that thing to make it worth it. But if you’re running a $2,000 ad campaign and you sell services at $300 an hour, and your average client works with you for 5 hours at a minimum, you’re pretty close before you get out the door.
Assume that it takes five to seven touchpoints to go from cold to sold. Look at each interaction as part of that framework. If you cannot afford, in any marketing endeavor, between five and seven touchpoints, you can’t do it. Say you’re doing postcard mailing. If you don’t have some kind of flow built in here that has those touchpoints, it’s not enough to convert.
A big part of not wasting money on marketing is thinking it through beforehand. Ask yourself: Are you touching people enough to convert them? Do you have the financial bandwidth to get them all the way through to the end, and will you earn enough at the end of it?
And if it’s not earning, stop now. Don’t try harder; try different.