The advertising world gets more complicated by the day. New media becomes available regularly. People gravitate from one social platform to another. Yes, even pandemics confuse the situation. However, if you are going to market your business there are certain basics you should follow. If you avoid these six common advertising mistakes your chances of success will increase greatly.
Campaigns Not Ads
Advertising is not a one-off. Do not begin advertising thinking you will create an ad and be successful. Advertising takes time and planning. Think in terms of advertising campaigns. Begin by understanding your customers’ sales cycle. How do they currently find out about you? What do they engage with to learn more about you? What triggers them to buy?
Define The Objective
By understanding your client’s sales’ cycle, you can then develop your advertising objective. For many businesses, the ultimate goal is to increase sales and revenues. However, that may not be the objective of your advertising. Often the sales cycle requires more than one touch point, so getting the prospect into the sales cycle may be the objective. Once in the sales funnel a nurturing effort can take place to lead the prospect to conversion.
With Objective established decide on the Key Performing Indicators (KPI’s) that will be used to measure performance. What steps must a prospect take in order for them to complete the objective? Those are the KPI’s you focus on as an advertiser. Too many Advertisers don’t define their most important metrics.
Know Your Client Avatar
It is very easy for a business to think they know their clients and do not need to research. And in some cases, that may be true. However, quite often it turns out there are many things companies do not know about their customers. Do the research before starting any advertising, it can save you a lot of money and time. Begin by asking your customers why they do business with you. Ask them for the five reasons they buy from you and record their responses exactly. Not only will you learn more about them you will learn how to communicate with them. Use the same language they used to talk about you when you speak with prospects.
Try and segment your clients. Look at them geographically, demographically, behaviorally and psychographically. It seems like a lot but the better you understand them the more precise your advertising. Precision increases results and saves money.
Lifetime Value and Customer Acquisition Cost
Budget is a concern for every advertiser. How much should we spend? What is a good ROI? There are many opinions on how to come up with a budget. Some use percentage of gross revenue based on industry. When developing your advertising budget take into consideration your customer acquisition cost (CAC) and the lifetime value of a client (LVC).
It is imperative you know the lifetime value of a client. This is important whether you are in a business with lots of repeat customers or if you provide a “one and done” service. Knowing the value of a customer will help you determine how much you should be willing to spend in order to acquire a new customer. The restaurant owner who knows an average customer visits four times a year, stays loyal for three years and spends $100 per visit, knows his LVC is $1,200. That owner may calculate it is ok to spend $110 to acquire a new customer even if they lose money on the first visit.
Finally, all advertising efforts must be tracked. There are so many tools available today that can record the results of your marketing you must choose one and use it. You need to know where you have succeeded and where you can improve. The only way to make improvements is by measuring all of your advertising efforts. Many very good platforms are out there and some, like Google Analytics are free. Monitor your results regularly. Look at your KPI’s and determine what is working and what is not. Then, be willing to adapt. Make changes if something clearly is not working.
A good way to avoid the six common advertising mistakes is to be process driven. Start with research into your customers buying cycle and really understand your customer. Come up with a realistic and productive objective. Understand the KPI’s necessary to achieve that objective and measure results. Have a good idea of what success will look like and then go after it. If something is not working, don’t be afraid to change it. Work smart and advertising will pay off for you.